Compute depreciation expense for 2010 and 2011

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Reference no: EM13490153

On January 1, 2010, LoCoco Corporation purchased a new assembly line for $100,000 cash and a $200,000, 10%, 5-year note payable. The assembly line has an estimated salvage value of $20,000 and an estimated useful life of 14 years.

Required:
1. Prepare a journal entry to record the acquisition of the assembly line.
2. Assume that LoCoco depreciates its assets using the straight-line method.
a. Compute depreciation expense for 2010 and 2011. Prepare a journal entry to record 2011 depreciation expense.
b. Compute accumulated depreciation at the end of 2010 and 2011.
c. Compute the assembly line's book value at the end of 2010 and 2011.

 

Reference no: EM13490153

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