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# Accounting questions

21.The following information is available from the financial statements of Bluebird Enterprises for the years ended on December 31, 2004 and 2005:
2005 2004
Buildings \$1,500,000 \$2,250,000
Accumulated depreciation 550,000 660,000

Loss on sale of building in 2005 was \$10,000.
The book value of the building sold was \$600,000. There were no buildings purchased in 2005.
Required:

a. Record the journal entries required to record the sale of the building by Bluebird.

22.Acme Sales Corporation sold a delivery truck on December 30, 2005, for \$15,000.
The truck was purchased for \$65,000 on January 1, 2003. At the time Acme
estimated its useful life at five years and its residual value at \$5,000. Depreciation is recorded annually on December 31.
Required:
a. Prepare the necessary journal entries to record the sale assuming Acme uses the straight-line depreciation method.
b. Prepare the necessary journal entries to record the sale assuming Acme uses the double-declining balance method of depreciation.

23. - Depreciation Methods.
A high-speed multiple-bit drill press costing \$240,000 has an estimated salvage value of \$20,000 and a life of ten years. What is the annual depreciation for each of the first two full years under the following depreciation methods?

1. Double-declining-balance method:

a. Year one:

b. Year two:

2. Units of production (activity) method (lifetime output is estimated at 110,000 units; the press produced 12,000 units in year one and 18,000 in year two):

a. Year one:

b. Year two:

3. Sum-of-the-years'-digits method:

a. Year one:

b. Year two:

4. Straight-line depreciation method:

a. Year one:

b. Year two:

24.- Lower of Cost or Market
Presented below is data relative to the 12/31/08 inventory of Kidd Company:
Number Units Original Cost Total Current
Item In Inventory Per Unit Original Cost Replacement Cost
A 3,000 \$1.09 \$3,270 \$1.08
B 3,000 1.30 3,900 1.15
C 3,000 1.50 4,500 1.05
D 3,000 1.60 4,800 1.65
E 3,000 1.80 5,400 1.70
Total 15,000 \$21,870

Appropriate
Upper Lower Inventory
Limit Limit Designated Valuation
Item ("Ceiling") ("Floor") Market (Totals)
A
B
C
D
E
Total