A major overhaul made to a machine increased its fair value and its production capacity by 30% without extending the machine's useful life. The cost of the improvement should be Select one: a. debited to accumulated depreciation. b. allocated between accumulated depreciation and the machine account. c. expensed. d. capitalized.

A major overhaul made to a machine increased its fair value and its production capacity by 30% without extending the machine's useful life. The cost of the improvement should be Select one: a. debited to accumulated depreciation. b. allocated between accumulated depreciation and the machine account. c. expensed. d. capitalized.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 8MC: An accelerated depreciation method that takes more expense in the first few years of the assets life...

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An improvement made to a machine increased its fair value and its production capacity by 25% without extending the machine's useful life. The cost of the improvement should be A) capitalized in the machine account. B) expensed. C) allocated between accumulated depreciation and the machine account. D) debited to accumulated depreciation.
Part I According to Chapter 10, what is the difference between an ordinary repair, an asset improvement, and an extraordinary repair? Please give an example of each and describe how each would be accounted for. Part II (1) Please explain the Units-of-Output depreciation method and give an example of when it might be used. (2) Suppose that a machine had a units-of-production depreciation rate of $2 per operating hour and that the machine was used 20,000 hours the first year. Please calculate the depreciation for the first year and show what the journal entry would be. (3) Can we assume that the first year's depreciation expense (calculated in question 2 above) will also be the depreciation expense for subsequent years? Why or why not?
Improvement of the production line resulting in an increase in productivity, $32,100 would be an expense in the period occured or would be capitalized and depreciated over the useful life of the asset?
Annuel maintenance costs related to its machinery, $71,400 would be an expense in the period occured or would be capitalized and depreciated over the useful life of the asset?
a.Determine the capitalized cost of the new machine b. Compute annual depreciation, accumulated depreciation, and the machine’s book value for the first three years assuming i. Straight-line depreciation ii. Double-declining-balance method c. Assume the machine is sold for $9,000 at the end of the third year after depreciation has been calculated. Determine the gain or loss assuming -Straight-line depreciation -Double-declining-balance method d. Given your answer in part c, if Mulligan was able to perfectly predict the future that the machine would be sold for $9,000 at the end of the third year, which depreciation method should Reddic choose? Ignore taxes.
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takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false Revision of Depreciation Equipment with a cost of $461,100 has an estimated residual value of $41,900, has an estimated useful life of 32 years, and is depreciated by the straight-line method. a. Determine the amount of the annual depreciation. b. Determine the book value at the end of the 17 full years of use. C. Assuming that at the start of the year 18 the remaining life is estimated to be 23 years and the residual value is estimated to be $33,700, determine the depreciation expense for each of the remaining 23 years. Previc All work saved. Email Instructor Sul
When calculating depreciation expense using the straight line method, useful life is expressed as time dollars Units expected to be produced salvage value Next *
Consider the following accounting information for a computer system: Cost basis of the asset, I = $10,000, Useful life, N = 5 years, Estimated salvage value, S = $0. Use the double-declining-depreciation method to compute the annual depreciation allowances and the resulting book values.
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