Blossom Limited purchased equipment on February 1, 2024, at a cost of $263,360As the CFO of the company, you are considering the merits of using the diminishing-balance or units-of-production method of depreciation instead of the straight-line methodwhich is currently being used for other equipment. The new equipment has an estimated residual value of $15,000 and an estimated useful life of either five years or 88,700 unitsDemand for the products produced by the equipment is sporadic so the equipment will be used more in some years than in others. Assume the equipment produces the following number of units each year: 14,200 units in 2024; 28,000 units in 2025; 20,000 units in 2026; 15,000 units in 2027; and 11,000 units in 2028; and 500 in 2029. Blossom has a Record the disposal of the huts on July 31, 2026, under each of the following independent assumptions: (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to O decimal places, e.g. 5,275.) 1. They were sold for $75,400. 2. They were sold for $35,400. Date Account Titles and Explanation
Blossom Limited purchased equipment on February 1, 2024, at a cost of $263,360As the CFO of the company, you are considering the merits of using the diminishing-balance or units-of-production method of depreciation instead of the straight-line methodwhich is currently being used for other equipment. The new equipment has an estimated residual value of $15,000 and an estimated useful life of either five years or 88,700 unitsDemand for the products produced by the equipment is sporadic so the equipment will be used more in some years than in others. Assume the equipment produces the following number of units each year: 14,200 units in 2024; 28,000 units in 2025; 20,000 units in 2026; 15,000 units in 2027; and 11,000 units in 2028; and 500 in 2029. Blossom has a Record the disposal of the huts on July 31, 2026, under each of the following independent assumptions: (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to O decimal places, e.g. 5,275.) 1. They were sold for $75,400. 2. They were sold for $35,400. Date Account Titles and Explanation
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
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Problem 8P: At the beginning of 2020, Holden Companys controller asked you to prepare correcting entries for the...
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:Blossom Limited purchased equipment on February 1, 2024, at a cost of $263,360As the CFO of the company, you are
considering the merits of using the diminishing-balance or units-of-production method of depreciation instead of the
straight-line methodwhich is currently being used for other equipment. The new equipment has an estimated residual
value of $15,000 and an estimated useful life of either five years or 88,700 unitsDemand for the products produced by the
equipment is sporadic so the equipment will be used more in some years than in others. Assume the equipment produces
the following number of units each year: 14,200 units in 2024; 28,000 units in 2025; 20,000 units in 2026; 15,000 units in
2027; and 11,000 units in 2028; and 500 in 2029. Blossom has a Record the disposal of the huts on July 31, 2026, under
each of the following independent assumptions: (List all debit entries before credit entries. Credit account titles are
automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for
the account titles and enter O for the amounts. Round answers to O decimal places, e.g. 5,275.)
1. They were sold for $75,400.
2. They were sold for $35,400.
Date Account Titles and Explanation
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