Explore BrainMass
Share

Explore BrainMass

    Straight Line Depreciation Scenarios

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    During the year of 2014, Johnson And Lincoln Enterprises, Inc. reported the following Income and Expenses (including necessary accruals) for Financial Accounting purposes:

    Gross Receipts $1,482,000
    Sales Returns And Allowances 109,000
    Purchases 510,000
    Dividends Received From Stock (Not Qualified Dividends)
    Investments In Less Than twenty percent (20%)
    Owned United States (U. S.) Corporation 80,000
    Interest Income:
    Taxable Interest 18,000
    Tax-Exempt Interest 7,200
    Salaries: Officers 150,000
    Other Employees 108,000
    Repairs And Maintenance 19,300
    Rent Expense - Office 84,000
    Rent Expense - Equipment 15,500
    Payroll Taxes (Federal And State) 19,600
    Interest Expense 25,200
    Advertising Expense 44,500
    Charitable Contributions 48,000
    Legal And Professional Fees 28,800
    Depreciation Expense 50,000 *
    Utilities Expense 27,300
    Employee's Health Insurance Premiums 14,200
    Entertainment Of Clients 5,000
    Officers' Life Insurance Premiums 14,400 **
    -1-
    * - Based upon Straight-Line Depreciation, a useful life of five (5) years and no salvage value for all assets (see specific assets below).

    ** - Johnson And Lincoln Enterprises, Inc. Is The Designated Beneficiary.

    The Johnson And Lincoln Enterprises, Inc. owns the following depreciable assets:
    ASSET DESCRIPTION DATE ACQUIRED ORIGINAL COST
    Automobile - 2013 Mercedes April 1, 2013 $ 50,000
    (Five-year Property)
    Automobile - 2013 Cadillac Sedan April 1, 2013 50,000
    (Five-year Property)
    Furniture And Fixtures May 1, 2012 150,000
    (Seven-year Property).

    © BrainMass Inc. brainmass.com October 10, 2019, 8:01 am ad1c9bdddf
    https://brainmass.com/business/capital-structure-and-firm-value/straight-line-depreciation-scenarios-604671

    Solution Preview

    The response is attached.

    Straight Line Depreciation
    During the year of 2014, Johnson And Lincoln Enterprises, Inc. reported the following Income and Expenses (including necessary accruals) for Financial Accounting purposes:
    Gross Receipts $1,482,000
    Sales Returns And Allowances 109,000
    Purchases 510,000
    Dividends Received From Stock (Not Qualified Dividends)
    Investments In Less Than twenty percent (20%)
    Owned United States (U. S.) Corporation 80,000
    Interest Income:
    Taxable Interest 18,000
    Tax-Exempt Interest 7,200
    Salaries: Officers 150,000
    Other Employees 108,000
    Repairs And Maintenance 19,300
    Rent Expense - Office 84,000
    Rent Expense - Equipment 15,500
    Payroll Taxes (Federal And State) 19,600
    Interest Expense 25,200
    Advertising Expense 44,500
    Charitable Contributions 48,000
    Legal And ...

    Solution Summary

    This solution provides step-by-step calculations and justifications to conduct three straight line depreciation scenarios.

    $2.19