Fundamental Accounting Principles Volume 2 17th Edition By Kermit D. Larson test bank

92)  Fisherman Company purchased a light truck on October 1, 2022 at a cost of $72,000. The truck is expected to last six years and have a residual value of $5,200. Fisherman Company uses the calendar year as their fiscal year, and the nearest whole month method for depreciation.
(a) What is the depreciation expense for 2022, assuming the straight-line method is used?
(b) What is the depreciation expense for 2023, assuming the double-declining-balance method at twice the straight-line rate is used?













93)  A new machine is expected to produce 60,000 units of product during its 5-year life. The machine cost $180,000 and is estimated to have a $20,000 residual value. If the machine produces 7,200 units of product during its first year, what is the depreciation for the year calculated by the units-of-production method (round rate to 2 decimals)?













94)  A new machine is expected to produce 40,000 units of product during its 5-year life. The machine cost $180,000 and is estimated to have a $20,000 residual value. If depreciation on the machine is calculated by the double-declining-balance method, what is the depreciation for the first year?













95)  A new machine is expected to produce 40,000 units of product during its 5-year life. The machine cost $38,000 and is estimated to have a $6,000 residual value. What is the first year's depreciation on the machine calculated by the straight-line method?













96)  On January 1, 2022, Swooper Corp acquired and placed in service a plane at a cost of $10,000,000. The plane's service life and residual value were estimated at 5 years and $1,500,000, respectively. Assume the company earns $3,200,000 each year before depreciation and taxes. Calculate depreciation for 2020-2024, assuming the following alternative depreciation methods are used.
(a) The straight-line method of depreciation.
(b) The double declining balance method of depreciation.













97)  On July 1, 2022, Suntera Corp. purchased and placed in service a machine with a cost of $460,000. Suntera estimated the service life to be 5 years or 30,000 units of output, with an estimated residual value of $6,000. During 2020, 2,600 units were produced.
(a) The straight-line method of depreciation
(b) The units-of-production method of depreciation













98)  On July 1, 2022, Delta Company purchased and placed in service a machine with a cost of $460,000. Delta estimated the service life to be 6 years or 60,000 units of output, with an estimated residual value of $80,000. During 2022, 15,000 units were produced. Prepare the necessary December 31, 2022, adjusting journal entry to record depreciation for 2020 assuming Delta uses the double-declining-balance method to the nearest whole month. Round all calculations to 4 decimals.













99)  On September 30, 2022, Sarina Industries acquired and placed in service a machine that cost $950,000. It was estimated that the machine has a service life of five years and a residual value of $77,566. Using the double-declining-balance method of depreciation, prepare a schedule showing the depreciation amounts for the years 222 through 2027 (use the nearest whole month method and round answers to the nearest dollar). Sarina closes its books on December 31 of every year.













100)       Ad Hock had the following property, plant and equipment purchases during 2022:

(1) On April 4, equipment costing $250,000 with a 5-year service life and an estimated $40,000 residual value was purchased.
(2) On October 4, a machine costing $330,000 with a 5-year service life and an estimated $50,000 residual value was purchased. Assuming Ad Hock has a December 31 year end, prepare the necessary adjusting journal entries at December 31, 2022 to record depreciation under the following depreciation methods (using the nearest whole month method):

(a) Straight-line
(b) Double-declining-balance













101)       On January 1, 2022, Boone Company purchased a machine for $75,000 that had a 6-year life and a residual value of $6,000. After 3 years of use, on January 1, 2025, Boone Company paid $7,500 to improve the efficiency of the machine. The effect of the expenditure was to increase the productivity of the machine without increasing its remaining useful life or changing its residual value. Boone uses straight-line depreciation.