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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
