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WEEK 7
INTERMEDIATE ACCOUNTING 1
DEPRECIATION

Exercise 11-4
(a) $279,000 – $15,000 = $264,000; $264,000 ÷ 10 yrs. = $26,400 (b) $264,000 ÷ 240,000 units = $1.10; 25,500 units X $1.10 = $28,050

(c) $264,000 ÷ 25,000 hours = $10.56 per hr.; 2,650 hrs. X $10.56 = $27,984 (d) | N(n+1)/2 = 10(11)/2 =55 ……… the total for 2013 is appro. $44,800 | | | (e) | $279,000 X 20% X 1/3 = 18,600 | | | | |

Exercise 11-8
June 1, 2010
Purchases $31,800
Freight 200
Installation 500
Total cost $32,500 Book value, old machine, June 1, 2014: | | [$35,200 – $3,000 – ($3,300 X 3)] = | $22,300 | Fair value | (20,000) | Loss on exchange | 2,300 | Cost of removal | 75 | Total loss | $ 2,375 | Basis of new machine | Cash paid ($35,000 – $20,000) | $15,000 | | Fair value of old machine | 20,000 | | Installation cost | 1,500 | | Total cost of new machine | $36,500 |

Exercise 11-9 (a) |
Asset | |
Cost | | Estimated Salvage | | Depreciable Cost | | Estimated Life | | Depreciation per Year | | A | | $ 40,500 | | $ 5,500 | | $ 35,000 | | 10 | | $ 3,500 | | B | | 33,600 | | 4,800 | | 28,800 | | 9 | | 3,200 | | C | | 36,000 | | 3,600 | | 32,400 | | 8 | | 4,050 | | D | | 19,000 | | 1,500 | | 17,500 | | 7 | | 2,500 | | E | | 23,500 | | 2,500 | | 21,000 | | 6 | | 3,500 | | | | $152,600 | | $17,900 | | $134,700 | | | |

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