# Accounting (Depreciation)

Anonymous

Question description

Problem 1

Red Brick Company purchased a front-end loader and tractor for \$42,000 on April 1, 2011. The tractor has an estimated useful life of six years or 25,800 hours and a residual value of \$2,000. Listed in the chart below is the number of hours the tractor and front-end loader were used during 2011 through 2017.

Year  # of hours used

2011  3,990

2012  4,270

2013  3,990

2014  4,150

2015  4,245

2016  4,075

2017  1,080

a) Calculate depreciation using the straight line method for 2011 through 2017.

b) Calculate depreciation using units of production method for 2011 through 2017.

c) Calculate depreciation using declining balance method for 2011 through 2017.

Problem 2

Custom Flags purchased a sewing machine in January 2012 for \$8,000. Custom depreciated the machine using the straight line method with an estimated useful life of 9 years and a residual value of \$800.

a) Calculate depreciation using the straight line method for 2012, 2013, and 2014.

b) Determine book value for the sewing machine as of December 31, 2014.

c) Record the journal entry for the sale of the sewing machine on April 1, 2015 for \$5,800.

d) Record the journal entry for the sale of the sewing machine on April 1, 2015 for \$5,200.

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