A company sells a plant asset that originally cost $492000 for $186000 on Decemb

Question

A company sells a plant asset that originally cost $492000 for $186000 on December 31, 2017. The accumulated depreciation account had a balance of $246000 after the current year's depreciation of $41000 had been recorded. The company should recognize a

$186000 loss on disposal.

$40000 gain on disposal.

$186000 gain on disposal.

$60000 loss on disposal.

A company purchased factory equipment for $590000. It is estimated that the equipment will have a $59000 salvage value at the end of its estimated 10-year useful life. If the company uses the double-declining-balance method of depreciation, the amount of annual depreciation recorded for the second year after purchase would be

$106200.

$84960.

$118000.

$94400.

A plant asset cost $178000 and is estimated to have a $24000 salvage value at the end of its 5-year useful life. The annual depreciation expense recorded for the third year using the double-declining-balance method would be

$19440.

$17007.

$25632.

$22257.

A factory machine was purchased for $179000 on January 1, 2017. It was estimated that it would have a $32000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 35000 hours in the 5 years. If the actual number of machine hours ran in 2017 was 3500 hours and the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2017 would be

$17900.

$29400.

$35800.

$14700.

A machine with a cost of $496000 has an estimated salvage value of $28000 and an estimated useful life of 5 years or 18000 hours. It is to be depreciated using the units-of-activity method of depreciation. What is the amount of depreciation for the second full year, during which the machine was used 6000 hours?

$165333.

$137333.

$93600.

$156000.

A company sells a plant asset that originally cost $492000 for $186000 on December 31, 2017. The accumulated depreciation account had a balance of $246000 after the current year's depreciation of $41000 had been recorded. The company should recognize a

$186000 loss on disposal.

$40000 gain on disposal.

$186000 gain on disposal.

$60000 loss on disposal.

A company purchased factory equipment for $590000. It is estimated that the equipment will have a $59000 salvage value at the end of its estimated 10-year useful life. If the company uses the double-declining-balance method of depreciation, the amount of annual depreciation recorded for the second year after purchase would be

$106200.

$84960.

$118000.

$94400.

A plant asset cost $178000 and is estimated to have a $24000 salvage value at the end of its 5-year useful life. The annual depreciation expense recorded for the third year using the double-declining-balance method would be

$19440.

$17007.

$25632.

$22257.

A factory machine was purchased for $179000 on January 1, 2017. It was estimated that it would have a $32000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 35000 hours in the 5 years. If the actual number of machine hours ran in 2017 was 3500 hours and the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2017 would be

$17900.

$29400.

$35800.

$14700.

A machine with a cost of $496000 has an estimated salvage value of $28000 and an estimated useful life of 5 years or 18000 hours. It is to be depreciated using the units-of-activity method of depreciation. What is the amount of depreciation for the second full year, during which the machine was used 6000 hours?

$165333.

$137333.

$93600.

$156000.

Explanation / Answer

1) Calculate gain or loss :

so answer is d) $60000 loss on disposal

2) Straight line dep rate = 100/10 = 10%

double decline rate = 10*2=20%

First year dep = 590000*20% = 118000

Second year dep = (590000-118000)*20% = 94400

so answer is d) $94400

3) Straight line dep rate = 100/5 = 20%

Double decline rate = 20*2=40%

Third year dep = (178000*60%*60%*40%) = 25632

so answer is c) $25632

4) Depreciation on 2017 :

Dep rate = (179000-32000)/35000 = 4.2 per hour

Dep for 2017 = 3500*4.20 = 14700

so answer is d) $14700

5) Depreciation rate = (496000-28000)/18000 = 26 per hour

second year dep = (6000*26) = 156000

so answer is d) $156000

Cost of machine 492000 Less: Accumlated dep (246000) Book value of machine 246000 Less: Sale price (186000) Loss on disposal 60000

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