Forum Accounting

Fiona Avangeline Jonathan / 2201735464

Halaman 470 (P9-3B)

A.

1.

Factory Machinery
Cash price € 55.000
Sales taxes € 3.300
Shipping costs € 325
Insurance during shipping € 75
Installation and testing € 1.300
Cost at facto € 60.000

Journal:

Account Title Debit Credit

Equipment € 60.000 € 60.000
Cash

2.

Cost - Residual Value = Depreciable Cost

€ 60.000 - € 6.000 = € 54.000

Depreciable Cost / Useful Life (years) = Annual Depreciation Expense

€ 54.000 / 4 = € 13.500

Journal:

Account Title Debit Credit

Depreciation Expense € 13.500 € 13.500
Acc. Depreciation Equipment

B.

1. Cost - Residual Value = Depreciable Cost

€ 130.000 - € 10.000 = € 120.000

Depreciable Cost / Useful Life (years) = Annual Depreciation Expense

€ 120.000 / 5 = € 24.000
Forum Accounting

Fiona Avangeline Jonathan / 2201735464

2.
Year Book Value Depreciation Annual End of Year
Beginning of Year Rate Depreciation
Expense Acc Dep Book
Value
2017 € 130.000 40% € 52.000 € 52.000 € 78.000
2018 € 78.000 40% € 31.200 € 83.200 € 46.800
2019 € 46.800 40% € 18.720 € 101.920 € 28.080
2020 € 28.080 40% € 11.232 € 113.152 € 16.848
2021 € 16.848 40% € 6.848 € 120.000 € 10.000

3. Depreciation Cost / Total Units of Activity = Depreciable Cost / unit

€ 120.000 / 24.000 = € 5 / unit

Year Units of Activity Depreciation Annual End of Year

Cost / unit Depreciation
Expense Acc Dep Book
Value
2017 4.700 €5 € 23.500 € 23.500 € 106.500
2018 8.200 €5 € 41.000 € 64.500 € 65.500
2019 6.800 €5 € 34.000 € 98.500 € 31.500
2020 2.500 €5 € 12.500 € 111.000 € 19.000
2021 1.800 €5 € 9.000 € 120.000 € 10.000

C. The lowest amount of depreciation expense is in year 2017 shown from the units of activity method
reports. Declining balance method report shows the lowest amount of depreciable expense in year
2021. All 3 methods have the same total amount over the 5 years period.

Halaman 471 (P9-5B)

A.

Date Account Title Debit Credit

March 1 Land 1.350.000
Cash 1.350.000
April 1 Depreciation Expense 248.000
Acc. Depreciation Equipment 178.500
Land 420.000
Gain on Disposal of Plant Assets 6.500
June 1 Cash 1.000.000
Land 310.000
Gain on Disposal of Plant Assets 690.000
October 1 Equipment 1.260.000
Cash 1.260.000
Forum Accounting

Fiona Avangeline Jonathan / 2201735464

December 1 Depreciation Expense 30.000

Acc. Depreciation Equipment 30.000
Acc. Depreciation Equipment 300.000
Equipment 300.000

B.

December 1 Depreciation expense 570.000

Acc. Depreciation buildings
570.000
December 31 Depreciation expense 2.959.500
Acc. Depreciation equipment
2.959.500

Land

Balance 2.000.000 June 1| 1.310.000

March 1| 1.350.000
Balance 3.040.000

Buildings

Balance 28.500.000
Balance 28.500.000

Acc. Depeciation buildings

Balance 12.100.000
December 31 adj. | 570.000
Balance 12.670.000

Equipment

Bal. 30.000.000 April 1 | 420.000

October 1 | 1.260.000 December 31 | 300.000
Balance 30.540.000
Forum Accounting

Fiona Avangeline Jonathan / 2201735464

Acc. Depreciation equipment

April 1 |178.500 Balance 4.000.000

December 31 | 300.000 April 1 | 10.500
December 31 | 30.000
December 31 adj | 2.959.000
Balance 6.521.500

C.
Durango Ltd.
Partial Statement of Financial Position
December 31, 2017
_________________________________________________________________________________
Plant Assets
Land € 3.040.000
Buildings € 28.500.000
Less: Acc. Dep. Buildings € 12.670.000
€ 15.830.000
Equipment € 30.540.000
Less: Acc. Dep. Equipment € 6.521.500
€ 24.018.500
___________

Total Plant Assets € 42.888.500