QUESTION 3 On January 1, 2020 Company purchases a printer at $800 by issuing a note and company also pays in cash $100

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QUESTION 3 On January 1, 2020 Company purchases a printer at $800 by issuing a note and company also pays in cash $100 duty tax and $20 for transportation. Its useful life is estimated as 4 years and the residual value is $100. 2 Make the joumal entry for the purchase in January 2020 (10 points) b. Fill in the depreciation schedule using straight line method (10 points) Years Computation Dep. Expense l? ta. Book Value View AaBbc AaBBC AaBbc AaBBC Az Heading 4 Heading 5 Heading 6 Heading 7 11 Paragraph Styl ... 3. 4 1.. 5 ... 1 + 6 .. UNIVERSITY c. Fill in the depreciation schedule using double declining method (10 points) Years Computation Dep. Expense Acc. Dep. Book Value

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Total printer cost = $ 800 + $ 100 + $ 20 = $920 a) Journal entry Jan 2020 Printer account dr $920 To note payable account $920 (Being Printer is purchased) b) Depreciation schedule using Straight line method Printer cost = $ 920 Useful life = 4 years Residual value = $100 Depreciation per year = (920 - 100)/4 = 205 Years computation Dep Exp Accu Dep Book Value 1 (920 - 100)/4 205 205 920 2 (920 - 100)/4 205 410 920 3 (920 - 100)/4 205 615 920 4 (920 - 100)/4 205 820 920 At the end of 4 th Year Accumulated Dep Tansferred to Printer account And thus only Residual value Present there c) Depreciation schedule using Double declining method Dep % = 100% Useful life = 4 years Normal Dep Rate = 100%/4 = 25% Double Declining Rate = 25%*2 = 50% Years computation Dep Exp Accu Dep Book Value 1 920 -( 50% of 920) 460 460 920 2 460 -(50% of 460) 230 690 920 3 230 -(50% of 230) 115 805 920 4 115 - 100 15 820 920

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QUESTION 3 On January 1, 2020 Company purchases a printer at $800 by issuing a note and company also pays in cash $100 duty tax and $20 for transportation

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Archived Solution

Years	computation	Dep Exp	Accu Dep	Book Value
1	(920 - 100)/4	205	205	920
2	(920 - 100)/4	205	410	920
3	(920 - 100)/4	205	615	920
4	(920 - 100)/4	205	820	920