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Taller Examples Ch10

The document provides examples and exercises related to various methods of calculating depreciation for assets, specifically focusing on machines and equipment. It includes scenarios for the activity method, straight-line method, sum-of-the-years'-digits method, and double-declining-balance method. Additionally, it presents a case study for Griffith Company to compute depreciation expenses using different methods and prepare journal entries.

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7 views

Taller Examples Ch10

The document provides examples and exercises related to various methods of calculating depreciation for assets, specifically focusing on machines and equipment. It includes scenarios for the activity method, straight-line method, sum-of-the-years'-digits method, and double-declining-balance method. Additionally, it presents a case study for Griffith Company to compute depreciation expenses using different methods and prepare journal entries.

Uploaded by

kemsmuel
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Contabilidad Financiera Básica

Taller PP&E – Depreciación


Kieso, D. E., Weygandt, J. J., Warfield, T. D. (2021-12-24). Intermediate Accounting, Enhanced eText, 18th Edition.

1. Example 10.1
Depreciable Base
FACTS Assume that Exact Science has a machine that costs $10,000 and has a salvage value of
$1,000.

QUESTION How would you compute the depreciable base of Exact Science’s machine?

2. Example 10.2
Activity Method Depreciation
✓ Cost of robot $500,000
✓ Estimated useful life 5 years
✓ Estimated salvage value $50,000
✓ Productive life in hours 30,000 hours

FACTS Refer to the Gordon Dining Services data above. Gordon Dining decides to use the activity
method to compute its depreciation for the current year.

QUESTION If Gordon Dining Services uses the delivery bot for 4,000 hours in the first year, how
would you compute its depreciation expense?

3. Example 10.3
Straight-Line Depreciation
FACTS Refer to the Gordon Dining Services data example 10.2. Gordon Dining decides to use the
straight-line method to compute its depreciation for the current year.

QUESTION If Gordon Dining Services uses the straight-line method, how would you compute its
depreciation expense in the first year?

4. Example 10.4
Decreasing-Charge (Sum-of-the-Years’-Digits) Depreciation
FACTS Refer to the Gordon Dining Services data in example 10.2. Gordon Dining decides to use the
sum-of-the-years’-digits method to compute its depreciation for the current year.

QUESTION If Gordon Dining Company uses the sum-of-the-years-digits method, how would you
compute its depreciation expense over the 5-year period?

5. Example 10.5
Declining-Balance (Double-Declining-Balance) Depreciation

FACTS Refer to the Gordon Dining Services data in example 10.2.

QUESTION If Gordon Dining Services uses the double-declining-balance method, how would you
compute its depreciation expense over the 5-year period?
6. Apply Depreciation Methods

FACTS Griffith Company purchased equipment for $106,000 on October 1, 2025. Griffith estimated
that the equipment will have a useful life of 8 years and a salvage value of $6,000. Estimated
production is 20,000 units, and estimated working hours are 10,000. During 2025, Griffith uses the
equipment for 800 hours, and the equipment produces 2,000 units.

INSTRUCTIONS:

a. Compute depreciation expense under each of the following methods. Griffith has a
calendar-year end.
1. Straight-line method for 2025.
2. Activity method (units of output) for 2025.
3. Activity method (working hours) for 2025.
4. Sum-of-the-years’-digits method for 2027.
5. Double-declining-balance method for 2026.

b. At the beginning of 2027, Griffith determines the equipment will have a remaining useful
life of 10 years, with a salvage value of zero. Assuming use of straight-line depreciation,
prepare the journal entry to record depreciation expense in 2027.

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