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وهدا كمان

QUESTION 8

On January 1, 2010, Jedkul Company purchased a machine for use in its production process.
Cash price of the machine was SR38,000
Related expenditures included:
Sales tax 1,700
Shipping costs 150
Insurance during shipping 80
Installation and testing costs 70
Oil and lubricants to be used during its first year of operation 100

Jedkul Company estimates that the useful life of the machine is 5 years with a SR5,000 salvage value remaining at the end of that time period. Assume the straight-line method of depreciation is used.
Instructions
a. What is the cost of the machine should be recorded on January 1, 2010.
b. The journal entry to record its purchase on January 1, 2010.
c. The journal entry to record annual depreciation at December 31, 2010.
d. Assuming Jedkul Company uses the double declining balance method of depreciation. Calculate the amount of depreciation expenses that should be recorded at December 31, 2010 and December 31, 2011

QUESTION 9
Marlow Company purchased equipment on January 1, 2009 for $70,000. It is estimated that the equipment will have a $5,000 salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 100,000 units over its 5-year life.
Instructions
Answer the following independent questions.
1. Compute the amount of depreciation expense for the year ended December 31, 2009, using the straight-line method of depreciation.
2. If 16,000 units of product are produced in 2009 and 24,000 units are produced in 2010, what is the book value of the equipment at December 31, 2010? The company uses the units-of-activity depreciation method.
3. Show the equipment account on the balance sheet as at December 31, 2010 using the units-of activity method
4. If the company uses the double-declining-balance method of depreciation, what is the balance of the Accumulated Depreciation—Equipment account at December 31, 2011?
5. Prepare the journal entry to record the depreciation expense for the year 2010 using the double-declining-balance method

QUESTION 10

Presented below are selected transactions for Corbin Company for 2010.
Jan. 1 Received $9,000 scrap value on retirement of machinery that was purchased on January 1, 2000. The machine cost $90,000 on that date, and had a useful life of 10 years with no salvage value.
April 30 Sold a machine for $28,000 that was purchased on January 1, 2007. The machine cost $75,000, and had a useful life of 5 years with no salvage value.
Dec. 31 Discarded a business automobile that was purchased on April 1, 2006. The car cost $32,000 and was depreciated on a 5-year useful life with a salvage value of $2,000.

Instructions
Journalize all entries required as a result of the above transactions. Corbin Company uses the straight-line method of depreciation and has recorded depreciation through December 31, 2009.