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mayamcmillan11
24.05.2021 •
Business
Presented below is information related to Novak Manufacturing Corporation.
Asset Cost Estimated Salvage Estimated Life (in years)
A $46,575 $6,325 10
B 38,640 5,520 9
C 41,400 4,140 9
D 21,850 1,725 7
E 27,025 2,875 6
Required:
a. Compute the rate of depreciation per year to be applied to the plant assets under the composite method.
b. Prepare the adjusting entry necessary at the end of the year to record depreciation for the year.
c. Prepare the entry to record the sale of asset D for cash of $5,520. It was used for 6 years, and depreciation was entered under the composite method.
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Ответ:
A. Assets Original Salvage Depreciable Depreciable SL Depreciation
Cost Value value Life Per Year
A $46,575 6,325 40,250 10 $4,025
B $38,640 5,520 33,120 9 $3,680
C $41,400 4,140 37,260 9 $4,140
D $21,850 1,725 20,125 7 $2,875
E $27,025 2,875 24,150 6 $4,025
Total $175,490 20,585 154,905 $18,745
Composite rate of Depreciation = Total Depreciation per year/Total Original Cost
Composite rate of Depreciation = 18745/175490
Composite rate of Depreciation = 0.106815
Composite rate of Depreciation = 10.68%
B. Adjusting entry Debit Credit
Depreciation Expense-Plant Asset $18,745
Accumulated Depreciation-Plant Asset $18,745
c. Journal Entry Debit Credit
Cash $5,520
Accumulated Depreciation-Plant Assets $16,330
Asset D $21,850
(Record Sale of asset D)
Ответ: