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For the declining-balance method, the company uses the double-declining rate. For the units-
of-activity method, total miles are expected to be 120,000. Actual miles of used for Bus
Bongbong were 2017, 24,000 and 2018, 34,000.
Instructions
a) Prepare adjusting entries for depreciation expense of each bus and amortization
expense of patent at the end of the year 2016, 2017, and 2018
b) Compute the amount of accumulated depreciation and book value on each bus and
patent at December 31, 2018.
c) If Bus Rogi was purchased on April 1 instead of January 1, what is the depreciation
expense for Bus Rogi in 2016 and 2017?
Instructions
a) Journalize the above transactions. The company uses straight-line depreciation for
buildings and equipment. The buildings are estimated to have a 25-year useful life and
no salvage value. The equipment is estimated to have a 10-year useful life and no
salvage value. Update the depreciation on assets disposed of at the time of sale or
retirement.
b) Record adjusting entries for depreciation for 2018.
c) Prepare the plant assets section of Aladdin’s balance sheet at December 31, 2018.