Depreciation Exercise
On January 1, 2018, Happy Hospital purchased an MRI for $8,375,000. It cost an additional $125,000 to deliver, install and calibrate the MRI. The MRI has a useful life of 5 years, at which time it is expected that it will be disposed of for a $100,000 salvage value.
a) Using straight-line depreciation method, prepare a schedule showing annual depreciation expense and accumulated depreciation for each of the 5 years.
b) Show how the asset and accumulated depreciation would appear on the balance sheet at December 31, 2018.
c) Prepare journal entries to record the assetâ€™s acquisition, annual depreciation for each year and the assetâ€™s sale for $100,000.
Year Annual Expense Accumulated Depr Net asset value
2018
2019
2020
2021
2022

Property, Plant & Equipment
Equipment
Less: Accumulated depreciation
Net Asset value
Inventory Control Exercise
Date Description Units Unit Cost Total Cost
July 1, 2018 Beginning Inventory 500 $20 $10,000
July 18, 2018 Inventory Purchased 800 $24 $19,200
July 25, 2018 Inventory Purchased 700 $26 $18,200
Total 2,000 $47,400
Happy Hospital used 1,400 units of medical supplies during the month of July 2018.
Required: Write journal entries to record the purchases of medical supplies, inventory value and the use of medical supplies for July 2018 using the following inventory costing methods:
a) First in, first out (FIFO) method
b) Last in, first out (LIFO) method

Depreciation Exercise On January 1, 2018, Happy Hospital purchased...