80.2K

Verified Solution

Link Copied!

Depreciation Calculations Get Company purchased a new machine on September 1, 2022, at a cost of $120,000. The company estimated that the machine will have a salvage value of $12,000. The machine is expected to be used for 10,000 working hours during its 5-year life. Instructions: Compute the depreciation expense under the following methods for the year indicated (a) Straight-line for 2022, 2023, and 2024. () Declining balance using double the straight-line rate for 2022 2023 and 2024 (c) Assume the straight-line method is used. What amount of gain or loss would Getz recognize if they sell the asset for $45,000 on 1/1/22? (d) Assume the double-declining balance method is used. What amount of gain or loss would Getz recognize if they sell the asset for $45,000 on 1/1/22? Disposal of Assets Grace Company owns equipment that cost $70,000 when purchased on January 1, 2019. It has been depreciated using the straight-line method based on estimated salvage value of $7,000 and an estimated useful life of 5 years. Instructions: Prepare Grace Company's journal entries to record the sale of the equipment in these four independent situations. Update depreciation on assets disposed of at time of sale (a) Sold for $40,000 on January 1, 2022. (b) Sold for $40,000 on April 1, 2022 (c) Sold for $15,000 on January 1, 2022 (d) Sold for $15,000 on September 1, 2022. (e) Repeat (a), assuming Grace uses double-declining balance depreciation (Repeat (c), assuming Grace uses double-declining balance depreciation

Answer & Explanation Solved by verified expert

See Answer