20) What basic information must be disclosed about long-term assets in the financial statements and accompanying footnotes?
21) Tennyson LTP purchased computers on January 1, 2011, at a cost of $120,000. The estimated useful life of the computers is 4 years and there is no estimated salvage value.
Required:
1. Complete the depreciation schedule below assuming Tennyson uses the straight-line method.
Year
|
Depreciation expense
|
Accumulated depreciation
|
Book value at the end of the year
|
2011
|
$
|
$
|
$
|
2012
|
$
|
$
|
$
|
2013
|
$
|
$
|
$
|
2014
|
$
|
$
|
$
|
2. Complete the depreciation schedule below assuming Tenison uses the double-declining balance method.
Year
|
Depreciation rate
|
Book value before depreciating the asset for the year
|
Depreciation expense for the year
|
Accumulated depreciation at the end of the year
|
2011
|
%
|
$
|
$
|
$
|
2012
|
%
|
$
|
$
|
$
|
2013
|
%
|
$
|
$
|
$
|
2014
|
|
$
|
$
|
$
|
3. Which method would report the greater net income to the shareholders for 2011?
4. Which method results in the higher amount of total depreciation expense over the four-year life of the asset?
22) A factory machine was purchased on January 1, 2011 for $30,000. The machine has an expected 9-year useful life and a $3,000 estimated salvage value. On January 1, 2017, the asset is sold for $3,500 cash.
Required:
1. Determine the total amount of depreciation expense taken over the life of the asset up to the day it is sold. Assume the company uses the straight-line method and has a calendar year.
2. Determine the asset’s book value on the day it is sold.
3. Determine if the asset is sold at a gain or a loss, and show the amount.
4 .Explain how the sale will be reported on the statement of cash flows.