Question

AD 201.01 Financial Accounting Anna Hohlnieder & mework: Chapter 7 HW Save are: 0 of 1 pt 4 of 103 complete HW Score: 27%, 2.7 of 10 pe --14 (similar to) Question Help un Time Amusement Park paid $320,000 for a concession stand. Fun Time started out depreciating the building using the straight-ine method over 20 years with a esidual value of zero. Aer using the concession stand for six years, Fun Time determines that the building will remain useful for only four more years. Record Fun Time's depreciation on the concession stand for year seven using the straight-ine method. (Record debits first, then credits. Exclude explanations from any journal Journal Entry Accounts Date Debit Credit Incor V 10/1) Choose from any is or her any number in the input fields and then click Check Answer All parts showing Clear A Check Answer This course CHAD 2011 nancial Account based on the calcune 17 MacBook Pro 2 G Search or type URL + # 3 $ 4 & 7 0 5 8 2 6 9 - W P R Y 0 U T m S D F G H J K L ?

Answer 1

For first 6 years: Cost of asset= $320,000 Residual value = $0 Useful life = 20 years Annual depreciation = (Cost of asset-Residual value)/Usefullife Annual depreciation = ($320,000 - $0) / 20 Annual depreciation = $16,000 Depreciation for 6 years = 6 * Annual depreciation Depreciation for 6 years = 6 * $16,000 Depreciation for 6 years = $96,000 Book Value at the end of year 6 = Cost of asset- Depreciation for 6 years Book Value at the end of year 6 = $320,000 - $96,000 Book Value at the end of year 6 = $224,000 For next 4 years: Book value of asset = $224,000 Residual value = $0 Remaining useful life = 4 years Annual depreciation = (Book value of asset-Residual value) / Remaining usefullife Annual depreciation = ($224,000 - $0) / 4 Annual depreciation = $56,000 Date Credit Journal Entry Depreciation Expense Accumulated Depreciation Debit 56,000 56,000