**QUESTION**

Text

Image

Tableau DA 10-2: Exercise, Straight-line depreciation and sale of asset LO C2, P2 The company founder hires us as consultants and asks that we oversee the accounting for new equipment purchased on January 1. The founder wants to know the Implications of different depreclation methods and estimates for the company's financlal statements. Those statements will be used to attract financing from new Investors and creditors. At the end of the equipment's first year in operation, we are given the following Tableau Dashboard.

Estimated Useful Life of Purchase Price \& Estimated Salvage Assets Value Actual \& Estimated Units-of-Production Year 2 Production Year 3 Production Year 4 Production Actual Estimated 0 25,000 50,000 75,000 100,000 125,000

1(a). Assume the company uses straight-line depreciation for the equipment. At the beginning of the second year, we determine that the equipment has only two more years of remaining useful life. Compute the equipment's book value at the end of its first year. 1(b). Assume the company uses straight-line depreciation for the equipment. At the beginning of the second year, we determine that the equipment has only two more years of remaining useful life. Compute the depreciation for the second year given the revised useful life estimate. 2. At the end of the equipment's useful life, the company plans to sell it. Record the sale of equipment at the end of its useful life for (a) $\$ 12,000$ cash and (b) $\$ 6,000$ cash. Complete this question by entering your answers in the tabs below. \begin{tabular}{|l|l|l|} \hline Required 1A & Required 1B & Required 2 \\ \hline \end{tabular} Assume the company uses straight-line depreciation for the equipment. At the beginning of the second year, we determine that the equipment has only two more years of remaining useful life. Compute the equipment's book value at the end of its first year.

1(a). Assume the company uses straight-line depreclation for the equipment. At the beginning of the second year, we determine that the equipment has only two more years of remaining useful life. Compute the equipment's book value at the end of its first year. 1(b). Assume the company uses straight-line depreclation for the equipment. At the beginning of the second year, we determine that the equipment has only two more years of remaining useful life. Compute the depreclation for the second year given the revised useful life estimate. 2. At the end of the equipment's useful life, the company plans to sell it. Record the sale of equipment at the end of its useful life for (a) $\$ 12,000$ cash and (b) $\$ 6,000$ cash. Complete this question by entering your answers in the tabs below. \begin{tabular}{|l|l|l|} \hline Required 1A & Required $1 \mathrm{~B} \quad$ Required 2 \\ \hline \end{tabular} Assume the company uses straight-line depreciation for the equipment. At the beginning of the second year, we determine that the equipment has only two more years of remaining useful life. Compute depreciation for the second year given the revised useful life estimate. \begin{tabular}{l} Revised Depreciation for Second Year \\ Book value at point of revision \\ \hline Revised salvage value \\ \hline Remaining depreciable cost \\ \hline Years of life remaining \\ \hline Revised annual depreciation for second year \end{tabular} $<$ Required 1A Required $2>$

1 (a). Assume the company uses straight-IIne depreclation for the equipment. At the beginning of the second year, we determine that the equipment has only two more years of remaining useful life. Compute the equipment's book value at the end of its first year. 1(b). Assume the company uses straight-IIne depreclation for the equipment. At the beginning of the second year, we determine that the equipment has only two more years of remaining useful life. Compute the depreclation for the second year given the revised useful life estimate. 2. At the end of the equipment's useful life, the company plans to sell It. Record the sale of equipment at the end of its useful life for (a) $\$ 12,000$ cash and (b) $\$ 6,000$ cash. Complete this question by entering your answers in the tabs below. \begin{tabular}{|l||l|l|} \hline Required 1A & Required 1B & Required 2 \\ \hline \end{tabular} At the end of the equipment's useful life, the company plans to sell it. Record the sale of equipment at the end of its useful life for (a) $\$ 12,000$ cash and $(b) \$ 6,000$ cash. View transaction list Journal entry worksheet Note: Enter debits before credits.

1(a). Assume the company uses straight-line depreclation for the equipment. At the beginning of the second year, we determine that the equipment has only two more years of remaining useful life. Compute the equipment's book value at the end of its first year. 1(b). Assume the company uses straight-line depreclation for the equipment. At the beginning of the second year, we determine that the equipment has only two more years of remaining useful life. Compute the depreclation for the second year given the revised useful life estimate. 2. At the end of the equipment's useful life, the company plans to sell it. Record the sale of equipment at the end of its useful life for (a) $\$ 12,000$ cash and (b) $\$ 6,000$ cash. Complete this question by entering your answers in the tabs below. \begin{tabular}{|l|l|l|} \hline Required 1A & Required 1B & Required 2 \\ \hline \end{tabular} At the end of the equipment's useful life, the company plans to sell it. Record the sale of equipment at the end of its useful life for (a) $\$ 12,000$ cash and $(b) \$ 6,000$ cash. View transaction list Journal entry worksheet Note: Enter debits before credits.