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ACCT 220 WEEK 5 PROBLEM SOLUTIONS

ACCT 220 WEEK 5 PROBLEM SOLUTIONS

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Author: Joyce Buda
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http://theperfecthomework.com/acct-220-week-5-problem-solutions/


There are three problems this week involving asset accounting.  Click on the tabs at the bottom of the 
 
 
spreadsheet to go to each problem.
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation
 
 
 
 
 
 
 
 
 
 
 
 
Ace Specialties bought a delivery truck for $40,000 cash.  The expected useful life is 5 years and the salvage value is $5,000.
Ace uses a calendar year and the truck was purchased on July 1, 2015.
 
 
 
Calculate the depreciation for each year using the straight line method and the double declining balance method.
 
Show the journal entry for year one for the double declining balance method.
 
 
 
 
 
 
 
 
 
 
Straight line method
 
 
 
 
 
year
 depreciation 
 remaining book value 
 
 
 
 
2015
 
 
 
 
 
 
2016
 
 
 
 
 
 
2017
 
 
 
 
 
 
2018
 
 
 
 
 
 
2019
 
 
 
 
 
 
2020
 
 
 
 
 
 
2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Double declining balance method
 
 
 
 
 
year
 depreciation 
 remaining book value 
 
 
 
 
2015
 
 
 
 
 
 
2016
 
 
 
 
 
 
2017
 
 
 
 
 
 
2018
 
 
 
 
 
 
2019
 
 
 
 
 
 
2020
 
 
 
 
 
 
2021
 
 
 
 
 
 
 
 
 
 
 
 
 
Journal Entry
 
 
 
 
 
date
 account 
 debit 
 credit 
 
 
 
31.12.15
 
 
 
 
 
 
 

Below you will see three scenarios for disposal of assets.  Prepare the journal entry for each.
 
 
 
 
 
 
 
 
 
On June 1, 2016 Axle Corporation sold a truck for $10,000 cash.  The truck originally cost $45,000 and the
accumulated depreciation as of May 31, 2016 was 37,600.
 
 
 
 
 
 
DATE
ACCOUNT
 DEBIT 
 CREDIT 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
On September 1, 2016 Smith Conveyor Corp sold a piece of factory machinery for $12,000.  The machine originally
cost $52,000 and had accumulated depreciation of $36,500 as of August 31, 2016.
 


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