A business purchased an asset on 1 January 20X1 at a cost of $160,000. The asset had an expected life of eight years and a residual value of $40,000. The straight-line method is used to measure depreciation. The financial year ends on 31 December. At 31 December 20X3, the estimated remaining life of the asset from that date is now expected to be only three more years, but the residual value is unchanged. What will be the net book value of the asset as at 31 December 20X3, for inclusion in the statement of financial position? $97,500 $100,000 $107,500 $115,000 A В D

A business purchased an asset on 1 January 20X1 at a cost of $160,000. The asset had an expected life of eight years and a residual value of $40,000. The straight-line method is used to measure depreciation. The financial year ends on 31 December. At 31 December 20X3, the estimated remaining life of the asset from that date is now expected to be only three more years, but the residual value is unchanged. What will be the net book value of the asset as at 31 December 20X3, for inclusion in the statement of financial position? $97,500 $100,000 $107,500 $115,000 A В D

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

= Sale of Asset Equipment acquired on January 9, 20Y3, at a cost of $503,000, has an estimated useful life of 17 years, an estimated residual value of $80,480, and is depreciated by the straight-line method. a. What was the book value of the equipment at the end of the fifth year, December 31, 20Y7? Round your interim calculations and final answer to the nearest dollar. Enter account decreases, cash outflows, and the income statement effects that decrease net income as negative amounts. However, for contra asset accounts, enter account increases as a negative value. Round annual depreciation to the nearest dollar and use this amount in your follow-on calculations. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. 1. Assuming that the equipment was sold on July 1, 2018, for $176,050, illustrate the effects on the accounts and financial statement of depreciation for the six months until the sale date.
The Bandor Group sold one of its plant assets on June 1 of the current year for $70,000. The asset had an original cost of $300,900 and an estimated residual value of $9,000. The firm used the straight-line method of depreciation assuming an estimated useful life of 7 years. The asset was in service for 5 years as of January 1 of the current year. Read the requirements Requirement a. Prepare the journal entry required to record the depreciation for the current year. (Record debits first, then credits. Exclude explanations from any journal entries) Account Depreciation Expense-Plant Asset Accumulated Depreciation-Plant Asset June 1 Requirement b. Prepare the journal entry required to record the sale of the asset. (Record debits first, then credits Exclude explanations from any journal entries.) Account June 1 Cash Accumulated Depreciation Plant Asset Loss on Sale of Plant Assets
A Kubota tractor acquired on January 8 at a cost of $54,000 has an estimated useful life of 10 years. Assuming that it will have no residual value. a. Determine the depreciation for each of the first two years by the straight-line method. First Year Second Year $ b. Determine the depreciation for each of the first two years by the double-declining-balance method. Do not round the double-declining balance rate. If required, round your final answers to the nearest dollar. First Year Second Year
On April 1, year 1, ABC. Ltd. purchased a piece of equipment for $ 440000 plus installation costs of $ 60000 that were necessary to make the equipment operational. ABC. Ltd. has a December 31, fiscal year end and uses the straight line depreciation method. The piece of equipment is expected to have a useful life of 10 years at which time it will have a residual value of $ 20000. What is the book value of the equipment as of December 31, year 3. Round your answer to the nearest dollar.
The double-declining-balance method is to be used for an asset with a cost of $90.000. estimated salvage value of $ 12.000. and estimated useful life of five years.(a) What is the depreciation for the first three tax years, assuming that the asset was placed in service at the beginning of the year?(b) If switching to the straight-line method is allowed, when is the optimal time to switch?
a storage tank acquired at the beginning of the fiscal year at a cost of 75,600 has an estimated residual value of 4000 and a estimated useful life of 20 years. a. determine the amount of annual depreciation by the straight line method b. determine the amount of depreciation for the first and second years computed by the double declining balance method . do not round the double declining balance rate. if required round answer to the nearest dollar
On January 1, 20X1, Bixby Inc. purchased equipment costing $75,000. The equipment is estimated to have a residual value of $6,000 and a four-year useful life. Part A: In the following chart, compare how much depreciation expense should be recorded each year of the asset’s life and over all four years if the company uses the straight-line versus the double-declining balance depreciation (DDB) method. Part B: Prepare the entry on 12/31/X2 to record depreciation expense for 20X2, assuming the straight-line depreciation method is used. Year Straight-Line Method DBB Method Year 1 of asset's life Year 2 of asset's life Year 3 of asset's life Year 4 of asset's life Total
Dexter Industries purchased packaging equipment on January 8 for $116,600. The equipment was expected to have a useful life of three years, or 20,000 operating hours, and a residual value of $6,600. The equipment was used for 8,700 hours during Year 1, 7,380 hours in Year 2, and 3,920 hours in Year 3. Determine the amount of depreciation expense for the three years ended December 31 by (a) the double-declining-balance method. Also determine the total depreciation expense for the year by this method. (Note: For the Declining Balance, round the multiplier to five decimal places. Then round the answer for the year to the nearest whole dollar.)
. An asset was purchased six years ago at a cost of P7,000. It was estimated to have a useful life of ten years with a salvage value of 300 at the end of the time. It is now of no future use and can be sold for only P800. Determine the sunk cost if the depreciation has been computed by: a. The straight-line method. b. The sum-of-the-year’s digits method