QUESTION #3

Date of Purchase May 01,2019

PART COST SALVAGE VALUE

Plane 15,000,000.00 1,500,000.00
Engine 8,000,000.00 1,500,000.00
Wheels 2,400,000.00 500,000.00
25,400,000.00

Cost 25,400,000.00
Accumulated Depreciation 5,468,750.00
Carrying Amount of Asset 19,931,250.00

JOURNAL ENTRY FOR THE SALE

Cash 4,000,000.00
Accumulated Depreciation 4,000,000.00
Engine 8,000,000.00

JOURNAL ENTRY
Year 2019
Depreciation Expense 2,083,333.33
Accumulated Depreciation 2,083,333.33

Year 2020
Depreciation Expense 3,125,000.00
Accumulated Depreciation 3,125,000.00

Engine Depreciation for Jan 31, 2021

Depreciation Expense 260,416.67
Accumulated Depreciation 260,416.67
USEFUL LIFE Depreciable amount Annual Depreciation Composite rate
10 13,500,000.00 1,350,000.00 12.30%
5 6,500,000.00 1,300,000.00
4 1,900,000.00 475,000.00
21,900,000.00 3,125,000.00
mposite rate