On September 1, 2010, LoCoco Corporation purchased a new assembly line machine for $100,000 cash and a $200,000, 10%, 5-year note payable. Installation costs for the machine totaled $44,000. The machine has an estimated salvage value of $20,000 and an estimated useful life of 15 years.
Required:
a. Prepare a journal entry to record the acquisition of the assembly line.
b. What is the machine's depreciable cost?
c. Assume that LoCoco depreciates its assets using the straight-line method.
1. Compute depreciation expense for 2010 and 2011. Prepare a journal entry to record 2010 depreciation expense.
2. Compute accumulated depreciation at the end of 2010 and 2011.
3. Compute the assembly line's book value at the end of 2010 and 2011.
d. Assume that LoCoco depreciates its assets using the double-declining balance method. (Round the DDB rate to the nearest whole percentage.)
1. Compute depreciation expense for 2010 and 2011. (Round depreciation expense to the nearest whole dollar.)
2. Compute accumulated depreciation at the end of 2010 and 2011.
3. Compute the assembly line's book value at the end of 2010 and 2011.

Question

On September 1, 2010, LoCoco Corporation purchased a new assembly line machine for $100,000 cash and a $200,000, 10%, 5-year note payable. Installation costs for the machine totaled $44,000. The machine has an estimated salvage value of $20,000 and an estimated useful life of 15 years.
Required:
a.	Prepare a journal entry to record the acquisition of the assembly line.
b.	What is the machine's depreciable cost?
c.	Assume that LoCoco depreciates its assets using the straight-line method. 
	1.	Compute depreciation expense for 2010 and 2011. Prepare a journal entry to record 2010 depreciation expense.
	2.	Compute accumulated depreciation at the end of 2010 and 2011.
	3.	Compute the assembly line's book value at the end of 2010 and 2011.
d.	Assume that LoCoco depreciates its assets using the double-declining balance method. (Round the DDB rate to the nearest whole percentage.)
	1.	Compute depreciation expense for 2010 and 2011. (Round depreciation expense to the nearest whole dollar.)
	2.	Compute accumulated depreciation at the end of 2010 and 2011.
	3.	Compute the assembly line's book value at the end of 2010 and 2011.

Quizplus · Accepted Answer

The Answer of On September 1, 2010, LoCoco Corporation purchased a new assembly line machine for $100,000 cash and a $200,000, 10%, 5-year note payable. Installation costs for the machine totaled $44,000. The machine has an estimated salvage value of $20,000 and an estimated useful life of 15 years.
Required:
a.	Prepare a journal entry to record the acquisition of the assembly line.
b.	What is the machine's depreciable cost?
c.	Assume that LoCoco depreciates its assets using the straight-line method. 
	1.	Compute depreciation expense for 2010 and 2011. Prepare a journal entry to record 2010 depreciation expense.
	2.	Compute accumulated depreciation at the end of 2010 and 2011.
	3.	Compute the assembly line's book value at the end of 2010 and 2011.
d.	Assume that LoCoco depreciates its assets using the double-declining balance method. (Round the DDB rate to the nearest whole percentage.)
	1.	Compute depreciation expense for 2010 and 2011. (Round depreciation expense to the nearest whole dollar.)
	2.	Compute accumulated depreciation at the end of 2010 and 2011.
	3.	Compute the assembly line's book value at the end of 2010 and 2011.

On September 1, 2010, LoCoco Corporation Purchased a New Assembly