A machine was purchased at a cost of $9,600,000 on June 30, 2020. The machine’s estimated salvage value is $1,600,000 and its expected life is 4 years.  The company reports on a calendar year basis.   Instructions: Answer the following independent questions   Record the depreciation expense for 2021, assuming the company used the double declining method in both 2020 and 2021 Determine the balance of accumulated depreciation on 12/31/2021 assuming the company used the sum-of- the-years digits method in both 2020 and 2021.  At what amount would the company report the machine on its 2020 balance sheet, if it chose to use the straight-line method?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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A machine was purchased at a cost of $9,600,000 on June 30, 2020. The machine’s estimated salvage value is $1,600,000 and its expected life is 4 years.  The company reports on a calendar year basis.

 

Instructions: Answer the following independent questions

 

  1. Record the depreciation expense for 2021, assuming the company used the double declining method in both 2020 and 2021
  2. Determine the balance of accumulated depreciation on 12/31/2021 assuming the company used the sum-of- the-years digits method in both 2020 and 2021. 
  3. At what amount would the company report the machine on its 2020 balance sheet, if it chose to use the straight-line method? 

 

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