Chippawa Industries acquired a delivery truck on January 4, 2010. The total cost of the truck...
Chippawa Industries acquired a delivery truck on January 4, 2010. The total cost of the truck was $145,000. Chippawa estimated that the truck would be used for 8 years before being sold for an estimated $23,500. Chippawa uses the double-declining balance method of depreciation. The total depreciation expense for the year ended December 31, 2010 was:
18,125
15,188
30,375
36,250
Hunter Corporation beginning of year retained earnings balance was $28,300. The corporation declared and paid dividends of $19,400 during the year and ended the year with a $36,500 balance. The net income or loss for the year was:
|
(11,200) |
||
|
8,200 |
||
|
27,600 |
||
|
17,100 |
Homework Answers
Chippawa Industries
Under DDB method, salvage value is ignored
SLM rate = 1/ 8 = 12.5 %
DDB rate = 12.5 * 2 = 25 %
Dep, ( 2010 ) = 145000 * 25 % = $ 36250 ( Option D is correct )
Hunter Corporation
OPening RE + NI - Dividend = Closing RE
28300 + NI - 19400 = 36500
NI + 8900 = 36500
NI = $ 27600
OPtion C is correct.
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