Please explain the solution to this general accounting problem with accurate principles. A company purchased factory equipment on April 1,2015, for $120,000. The equipment is estimated to havea salvage value of $12,000 at the end of its 8-year usefullife. Using the straight-line method of depreciation, theamount to be recorded as depreciation expense for theyear ending December 31, 2015, is

Step 1: Definition of Straight-Line DepreciationStraight-Line Depreciation is a method used to…

Answered: A company purchased factory equipment…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter10: Long-lived Tangible And Intangible Assets

Section: Chapter Questions

Problem 22E

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On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.
Which of the following is not true about the MACRS depreciation system: A salvage value must be determined before depreciation percentages are applied to depreciable real estate. Residential rental buildings are depreciated over 27.5 years straight-line. Commercial real estate buildings are depreciated over 39 years straight-line. No matter when during the month depreciable real estate is purchased, it is considered to have been placed in service at mid-month for MACRS depreciation purposes.
Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.
A company purchased factory equipment on June 1, 2017, for $101800. It is estimated that the equipment will have a $13000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2017, is $5180. $4440. $3700. $8880.
On January 1, 2017, Bushong Company purchased equipment at a cost of $12,600. The equipment had an estimated useful life of 6 years or 30,000 hours. The equipment will have a $1,200 salvage value at the end of its life. The depreciation expense for the year ending December 31, 2017, using the straight-line method would be a.$471. b.$1,900. c.$1,883. d.$475.
Kingbird Co. purchased machinery for $170,100 on January 1, 2017. It is estimated that the machinery will have a useful life of 20 years, a salvage value of $14,700, production of 76,400 units, and working hours of 40,300. In 2017, the company used the machinery for 13,702 hours and the machinery produced 14,516 units. Compute the depreciation under the working hours method.
Antigua Company purchased a depreciable asset for $45,000 on October 1, 2015. The estimated salvage value is $9,000, and the estimated useful life is 6 years. The straight-line method is used for depreciation. What is the book value on July 1, 2017 when the asset is sold?
On January 1, 2017, Bushong Company purchased equipment at a cost of $12,600. The equipment had an estimated useful life of 6 years or 30,000 hours. The equipment will have a $1,200 salvage value at the end of its life. The equipment was used 6,500 hours in 2017. The depreciation expense for the year ending December 31, 2017, using the units-of-production method would be a.$2,470. b.$2,730. c.$3,800. d.$6,500.
Lockard Company purchased machinery on January 1, 2017, for $80,000. The machinery is estimated to have a salvage value of $8,000 after a useful life of 8 years. (a) Compute 2017 depreciation expense using the sum-of-the-years’-digits method. (b) Compute 2017 depreciation expense using the sum-of-the-years’-digits method, assuming the machinery was purchased on April 1, 2017.
Maserati Corporation purchased a new machine for its assembly process on August 1, 2014. The cost of this machine was $150,000. The company estimated that the machine would have a salvage value of $24,000 at the end of its service life. Its life is estimated at 5 years and its working hours are estimated at 21,000 hours. Year- end is December 31. Instructions: Compute the depreciation expense under the following methods. (a) Straight-line depreciation. Sum-of-the-Years'-Digits Method Double-Declining Balance Method
(Depreciation Computations—Four Methods) Robert Parish Corporation purchased a new machine for its assembly process on August 1, 2017. The cost of this machine was $117,900. The company estimated that the machine would have a salvage value of $12,900 at the end of its service life. Its life is estimated at 5 years, and its working hours are estimated at 21,000 hours. Year-end is December 31.InstructionsCompute the depreciation expense under the following methods. Each of the following should be considered unrelated.(a) Straight-line depreciation for 2017.(b) Activity method for 2017, assuming that machine usage was 800 hours.(c) Sum-of-the-years’-digits for 2018.(d) Double-declining-balance for 2018.
Barton Construction Company purchased a piece of heavy equipment on January 1, 2017, which it is depreciating using the straight-line method. The equipment's useful life is 5 years and its residual value is $5,000. Barton recorded depreciation expense of $44,000 in 2018. What is the inferred original cost?

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