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168 on july 1st hartford construction purchases a bulldozer for 330 000 the equipmen 4298713

 

168. On July 1st, Hartford Construction purchases a bulldozer for $330,000. The equipment has a 9 year life with a residual value of $15,000. Hartford uses units-of-production method depreciation and the bulldozer is expected to yield 22,500 operating hours.

(a)       Calculate the depreciation expense per hour of operation.

(b)       The bulldozer is operated 1,250 hours in the first year, 2,755 hours in the second year, and 1,225 hours in the third year of operations. Journalize the depreciation expense for each year. 

(a)  Hourly depreciation is:

Acquisition cost

$330,000

Less residual value

    15,000

Depreciable amount

$315,000

Service life in hours

   22,500

Hourly depreciation 

$        14

 

 

 

169. Eagle Country Club has acquired a lot to construct a clubhouse.  Eagle had the following costs related to the construction:
 

Architects’ Fees

 

$  25,000

Construction Labor

 

80,000

Engineers’ Fees

 

15,000

Fences around building

 

9,000

Grading and leveling

 

10,000

Insurance costs incurred during construction

 

7,000

Interest on money borrowed for construction

 

5,000

Land

 

37,000

Building Materials

 

     237,000

Sales Taxes

 

6,000

Trees and Shrubs

 

6,000

 

 

 

Determine the cost of the Club House to be reported on the balance sheet. 

 

 

 

 

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