1. Shay Enterprises purchased equipment on March 18, 2018, at a cost of$40,000. The equipment was expected to have a 10-year service life,$4,000 in residual value. Sanchez uses the declining balance (150%)method to calculate depreciation. On November 21, 2020, theequipment was sold for $30,000.Assuming Shay used the full-month, half-year and full-year (beginning ofperiod) conventions, respectively, what amount of gain or loss would berecognized on the sale date?O A) $7,778; $4,080; $4,400B) $2,572; $(182); $(10)C) $3,969; $909; $1,100D) $6,572; $3,818; $3,990

Depreciation can be referred to as a decline in the value of asset due to its usage in the normal…

Answered: 1. Shay Enterprises purchased equipment…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Exon Company purchased equipment for $120,000 on January 1, 2018. The equipment has an estimated residual value of $10,000 and an estimated useful life of 10 years. The company depreciates the equipment using the double declining balance method. On January 1, 2021, the company determines that the total useful life is 8 years and the estimated residual value is $3,000. Required: 1. The equipment's book value at January 1, 2021 is $ Round your final answer to the nearest dollar. 2. The annual depreciation expense for 2021 is $ Round your final answer to the nearest dollar.
Please answer complete and working note
Valley, Inc., purchased a new machine on October 1 of the 2020 at a cost of $118,000. The machine's estimated useful life at the time of the purchase was 5 years, and its residual value was $16,000. The company reports on a calendar year basis. Prepare a complete depreciation schedule, beginning with the 2020, under each of the following methods listed (assume that the half-year convention is used). a- Straight-line. b- 200 percent declining-balance. c- 150 percent declining-balance, switching to straight-line when that maximizes the expense. d- Which of the three methods computed in part a is most common for financial reporting purposes? Explain.
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