1. Crane Corporation purchased a machine on July 1. 2023 for $1500000. The machine was estimated to have a useful life of 10 years with an estimated salvage value of $83000. In 2026, it became apparent that the machine would become obsolete after December 31. 2030 and thus have no scrap value. Accumulated depreciation on this machine at December 31, 2025 was $357000. What amount should be charged to depreciation expense for 2026? O $228600 O $245200
1. Crane Corporation purchased a machine on July 1. 2023 for $1500000. The machine was estimated to have a useful life of 10 years with an estimated salvage value of $83000. In 2026, it became apparent that the machine would become obsolete after December 31. 2030 and thus have no scrap value. Accumulated depreciation on this machine at December 31, 2025 was $357000. What amount should be charged to depreciation expense for 2026? O $228600 O $245200
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:1. Crane Corporation purchased a
machine on July 1. 2023 for
$1500000. The machine was
estimated to have a useful life of
10 years with an estimated
salvage value of $83000. In 2026,
it became apparent that the
machine would become obsolete
after December 31. 2030 and thus
have no scrap value. Accumulated
depreciation on this machine at
December 31, 2025 was $357000.
What amount should be charged
to depreciation expense for 2026?
O $228600
O $245200
O $311600
O $212000
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