BRIEF EXERCISE 9-9 (Continued)
Cost of equipment $41,000
Less accumulated depreciation 37,000
BRIEF EXERCISE 9-10
(b) Cash …………………………………………………………………. 18,000
Cost of equipment $72,000
Less: Accumulated depreciation 47,250*
BRIEF EXERCISE 9-11
(a) Depletion cost per unit = $7,000,000 ÷ 35,000,000 = $.20 depletion cost
per ton
$.20 X 5,000,000 = $1,000,000
(b) Ore mine ………………………………………………. $7,000,000
BRIEF EXERCISE 9-12
BRIEF EXERCISE 9-13
DENT COMPANY
Balance Sheet (partial)
December 31, 2015
Property, plant, and equipment
Coal mine …………………………………… $ 500,000
Less: Accumulated depletion ……… 108,000 $392,000
Buildings ……………………………………. 1,100,000
Less: Accumulated depreciation—
BRIEF EXERCISE 9-14
$44.1+ $44.5
2
*BRIEF EXERCISE 9-15
Equipment (new) …………………………………………………….. 29,000
Accumulated Depreciation—Equipment ……………………. 30,000
*BRIEF EXERCISE 9-15 (Continued)
Fair value of old delivery
Fair value of old delivery
equipment $24,000
*BRIEF EXERCISE 9-16
Equipment (new) ……………………………………………………… 38,000
Fair value of old delivery
equipment $33,000
Fair value of old delivery
Book value of old delivery
SOLUTIONS FOR DO IT! REVIEW EXERCISES
DO IT! 9-1
and get it ready for use:
Negotiated purchase price ……………………………………….. $24,000
Installation of special shelving …………………………………. 1,100
DO IT! 9-2
Depreciation expense
=
Cost – Salvage
=
$15,000 – $3,000
=
$1,500
Useful life
8 years
Depreciation Expense ……………………………………………… 1,500
(To record annual depreciation on mower)
DO IT! 9-3
Original depreciation expense = ($70,000 – $2,000) ÷ 8 years = $8,500
Book value, $70,000 – $25,500 ……………………………………… $44,500
Less: Salvage value …………………………………………………… 6,000
DO IT! 9-4
(a) Sale of truck for cash at a gain:
Cash …………………………………………………………………. 26,000
(b) Sale of truck for cash at a loss:
Cash …………………………………………………………………. 15,000
DO IT! 9-5
SOLUTIONS TO EXERCISES
EXERCISE 9-1
purchaser, insurance costs during transit, and installation costs.
EXERCISE 9-2
EXERCISE 9-3
(a) Cost of land
Cash paid ……………………………………………………………….. $75,000
Net cost of removing warehouse
($8,600 – $1,700) ………………………………………………….. 6,900
to Land Improvements.
EXERCISE 9-4
EXERCISE 9-7
(a) (1) 2015: ($34,000 – $2,000)/8 = $4,000
(2) ($34,000 – $2,000)/100,000 = $0.32 per mile
(3) 2015: $34,000 X 25% = $8,500
(b) (1) Depreciation Expense ……………………………………… 4,000
(2) Equipment ………………………………………………………. $34,000
EXERCISE 9-8
(a)
Type of Asset
Building
Warehouse
Book value, 1/1/15
Less: Salvage value
Depreciable cost
Remaining useful
life in years
Revised annual
depreciation
($800,000–$114,000)
$686,000
26,000
$660,000
44
$ 15,000
($100,000–$19,000)
$81,000
6,000
$75,000
15
$ 5,000
EXERCISE 9-9
Jan. 1 Accumulated Depreciation—Equipment ……. 62,000
June 30 Depreciation Expense ……………………………… 4,500
30 Cash ……………………………………………………….. 14,000
Accumulated Depreciation—Equipment
Dec. 31 Depreciation Expense ……………………………… 5,000
31 Loss on Disposal of Plant Assets …………….. 8,000
EXERCISE 9-10
(a) Cash ………………………………………………………………. 31,000
(b) Depreciation Expense
[($65,000 – $5,000) X 1/5 X 4/12] …………………….. 4,000
Accumulated Depreciation—Equipment
($36,000 + $4,000) ………………………………………… 40,000