A. On September 22, 2022, Marvel Inc. purchased machinery for $190,000. Residual value was estimated to be $10,000. The machinery will be depreciated over eight years using the sum-of-the-years’-digits method. If depreciation is computed on the basis of the nearest full month, how much depreciation expense for 2023 on this machinery should Marvel record?
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Answer ALL questions. - Set financial calculator to zero decimal place.
A. On September 22, 2022, Marvel Inc. purchased machinery for $190,000. Residual value was estimated to be $10,000. The machinery will be
If depreciation is computed on the basis of the nearest full month, how much depreciation expense for 2023 on this machinery should Marvel record?
B. Medard Co. purchased equipment in January of 2013 for $90,000. The equipment was being depreciated on the straight-line method over an estimated useful life of 20 years, with no residual value. At the beginning of 2023, when the equipment had been in use for 10 years, the company paid $15,000 to overhaul the equipment. As a result of this improvement, the company estimated that the useful life of the equipment would be extended an additional 5 years.
What should be the depreciation expense recorded for this equipment in 2023?
C. In January, 2023, Demba Corporation purchased a mineral mine for $3,400,000 with removable ore estimated by geological surveys at 2,000,000 tons. The property has an estimated value of $200,000 after the ore has been extracted. The company incurred $1,000,000 of development costs preparing the mine for production. During 2023, 500,000 tons were removed and 400,000 tons were sold.
What is the amount of depletion that Demba should expense for 2023?
D. Zebra Company purchases Glow Inc. for $13,985,000 cash on January 1, 2023. The book value of Glow Inc. net assets reported on its December 31, 2022
How much
Step by step
Solved in 3 steps with 5 images
Zebra Company purchases Glow Inc. for $13,985,000 cash on January 1, 2023. The book value of Glow Inc. net assets reported on its December 31, 2022
How much
by Bartleby Expert
