Question Details

The calculation of depreciation using the declining balance method



1.	A plant asset cost ₤192,000 and is estimated to have a ₤24,000 residual value at the end of its 8-year useful life. The annual depreciation expense recorded for the third year using the double-declining-balance method would be

2.	A factory machine was purchased for $90,000 on January 1, 2011. It was estimated that it would have a $18,000 residual value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. The company ran the machine for 4,000 actual hours in 2011. If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2011 would be

	3.	Which of the following methods of computing depreciation is production based?

	4.	Management should select the depreciation method that

	5.	The depreciation method that applies a constant percentage to depreciable cost in calculating depreciation is

6.	On October 1, 2011, Holt Company places a new asset into service. The cost of the asset is $80,000 with an estimated 5-year life and $20,000 residual value at the end of its useful life. What is the depreciation expense for 2011 if Holt Company uses the straight-line method of depreciation?

	7.	On October 1, 2011, Holt Company places a new asset into service. The cost of the asset is $80,000 with an estimated 5-year life and $20,000 residual value at the end of its useful life. What is the book value of the plant asset on the December 31, 2011, statement of financial position assuming that Holt Company uses the double-declining-balance method of depreciation?


8.	Which depreciation method is most frequently used in businesses today?


	9.	Mott Company uses the units-of-activity method in computing depreciation. A new plant asset is purchased for $24,000 that will produce an estimated 100,000 units over its useful life. Estimated residual value at the end of its useful life is $2,000. What is the depreciation cost per unit?

10.	Units-of-activity is an appropriate depreciation method to use when


11.	The calculation of depreciation using the declining balance method,

	12.	Farr Company purchased a new van for floral deliveries on January 1, 2011. The van cost €40,000 with an estimated life of 5 years and €10,000 residual value at the end of its useful life. The double-declining-balance method of depreciation will be used. What is the depreciation expense for 2011?

13.	Farr Company purchased a new van for floral deliveries on January 1, 2011. The van cost €40,000 with an estimated life of 5 years and €10,000 residual value at the end of its useful life. The double-declining-balance method of depreciation will be used. What is the balance of the Accumulated Depreciation account at the end of 2012?

	14.	Moreno Company purchased equipment for $450,000 on January 1, 2010, and will use the double-declining-balance method of depreciation. It is estimated that the equipment will have a 3-year life and a $20,000 residual value at the end of its useful life. The amount of depreciation expense recognized in the year 2012 will be

	15.	A plant asset was purchased on January 1 for $60,000 with an estimated residual value of $10,000 at the end of its useful life. The current year's Depreciation Expense is $5,000 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the year is $30,000. The remaining useful life of the plant asset is

16.	Equipment was purchased for $75,000. Freight charges amounted to $3,500 and there was a cost of $10,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $15,000 residual value at the end of its 5-year useful life. Depreciation expense each year using the straight-line method will be

17.	Equipment was purchased for $17,000 on January 1, 2010. Freight charges amounted to $700 and there was a cost of $2,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $3,000 residual value at the end of its 5-year useful life. What is the amount of accumulated depreciation at December 31, 2011, if the straight-line method of depreciation is used?

18.	A company purchased factory equipment on June 1, 2011, for ¥800,000. It is estimated that the equipment will have a ¥50,000 residual value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2011, is

19.	A plant asset was purchased on January 1 for $40,000 with an estimated residual value of $8,000 at the end of its useful life. The current year's Depreciation Expense is $4,000 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the year is $20,000. The remaining useful life of the plant asset is

20.	Sargent Corporation bought equipment on January 1, 2011. The equipment cost €180,000 and had an expected residual value of €30,000. The life of the equipment was estimated to be 6 years. The depreciable cost of the equipment is





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