7. Royal Company purchased a dump truck at the beginning of 2012 at a cost of $60,000. The truck had an estimated life of 6 years and an estimatedresidual value of $24,000. On January 1, 2014, the company made major repairs of $20,000 to the truck that extended the life 1 year. Thus, startingwith 2014, the truck has a remaining life of 5 years and a new salvage value of $8,000. Royal uses the straight-line depreciation method.

The objective of the question is to calculate the depreciation expense for the truck for each year…

Answered: 7. Royal Company purchased a dump truck…

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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A store building was constructed on January 2, 2009 with a cost of P570.000. Its estimated useful life is 16 years with scrap value of P70.000 after 16 years. In January, 2014 replacement of some worn-out parts of the building costing P50,000 was spent. After the repairs, the building was appraised with a fair market value of P770,000. The allowable deduction for depreciation for the year 2014 is:
Eight years ago, a company purchased an injection molding machine at $40,000. It has been depreciated according to conventional straight-line method (book depreciation) over a 12-year life. The estimated salvage value at the end of 12 years (from the purchase) was $4,000. The machine has a current market value of $15,000. Assume the company purchases a new machine at a cost of $50,000 with a salvage value of $5,000 and a 10 year life. The firm's income tax rate is 40% and their discount rate is 10%. What is the net depreciation tax shield during year three?
Colquhoun International purchases a warehouse for $332,000. The best estimate of the salvage value at the time of purchase was $17,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. A. Calculate annual depreciation expense for the first four years. $fill in the blank ae55fc07ff8d04f_1 B. Determine the depreciation expense for the final fifteen years of the asset’s life. $fill in the blank ae55fc07ff8d04f_2 C. Prepare the journal entry for year five. If an amount box does not require an entry, leave it blank. fill in the blank fill in the blank fill in the blank fill in the blank
.
Goodson Healthcare purchased a new sonogram imaging unit for $300,000 and a truck body andchassis for an additional $100,000 to make the unit mobile. The unit-truck system will be depreciatedas one asset. The functional life is 8 years, and the salvage is estimated to be 9% of the purchaseprice of the imaging unit regardless of the number of years of service. Use classical Straight Linedepreciation to determine the salvage value, annual depreciation, and book value after 5 years ofservice.
The original equipment was purchased 3 years ago for $200,000 and was depreciating using the 5 Year MACRS depreciation schedule over 6 years. It has currently been depreciated 71% of the original cost. The equipment was planned to be sold at the end of it’s 5th year of use before it was fully depreciated for a salvage value in two years at an estimated $30,000. The old equipment has a current salvage value of $98,000.What's is the new NPV?
.
On January 1, 2003, Superior Landscaping Company paid P17,000 to buy a stump grinder. If Superior uses the grinder to remove 2,500 stumps per year, it would have an estimated useful life of 10 years and a salvage value of P4,500. The amount of depreciation expense for the year 2003, using units-of-production depreciation and assuming that 3,500 stumps were removed, is?
On April 1, 2016, the KB Toy Company purchased equipment to be used in its manufacturing process. Theequipment cost $48,000, has an eight-year useful life, and has no residual value. The company uses the straightline depreciation method for all manufacturing equipment.On January 4, 2018, $12,350 was spent to repair the equipment and to add a feature that increased its operating efficiency. Of the total expenditure, $2,000 represented ordinary repairs and annual maintenance and$10,350 represented the cost of the new feature. In addition to increasing operating efficiency, the total usefullife of the equipment was extended to 10 years.Required:Prepare journal entries for the following:1. Depreciation for 2016 and 20172. The 2018 expenditure3. Depreciation for 2018
Sammie J’s pizza shop purchased a new delivery vehicle on January 1, 2015. The vehicle cost $16,850, has a salvage value of $2,270 and a useful life of 6 years. Calculate depreciation for years 1-6. On January 1st, 2018 Sammie J’s Pizza repaired the engine in the delivery truck for a cost of $3,800 for the vehicle that was originally purchased on January 1, 2015. This is a capital expenditure. Revise the depreciation for the delivery truck with the revised cost and new useful life of 8 years. I am using straight-line depreciation, please show me how the answer is calculated. Thank you so much
A store building was constructed on January 2, 2009 with a cost of P570,000. Its estimated useful life is 16 years with scrap value of P70,000 after 16 years. In January, 2014 replacement of some worn-out parts of the building costing P50,000 was spent. After the repairs, the building was appraised with a fair market value of P770,000. The allowable deduction for depreciation for the year 2014 is:

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