Depreciation Methods - Numerical Applications
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Q. A company has a net income of $120,000 and dividends of $30,000. What is the retained earnings at the end of the year?
Q. A company has an inventory of $50,000 at the beginning of the year and purchases an additional $20,000. If the ending inventory is $30,000, what is the cost of goods sold?
Q. A company purchased a machine for $50,000 with a useful life of 5 years and no salvage value. What is the annual depreciation expense using straight-line method?
Q. A company uses the FIFO method for inventory valuation. If it has 100 units at $10 each and purchases 50 units at $12 each, what is the value of 80 units sold?
Q. A company uses the units of production method for a machine that produces 100,000 units over its life. If the machine costs $40,000 and has a salvage value of $4,000, what is the depreciation per unit?
Q. A piece of equipment costing $15,000 is depreciated using the double declining balance method. What is the depreciation expense for the first year?
Q. A vehicle costing $30,000 has a useful life of 4 years and a salvage value of $3,000. What is the annual depreciation using the declining balance method at 25%?
Q. If a company has a trial balance showing total debits of $150,000 and total credits of $145,000, what is the amount of the discrepancy?
Q. If a company purchased a building for $200,000 and expects it to last 20 years with a salvage value of $20,000, what is the annual straight-line depreciation?
Q. Using the straight-line method, if a company buys a computer for $2,000 with a useful life of 4 years and a salvage value of $200, what is the annual depreciation?
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