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+ |I comparableFord FocusS ElecuTc automobler wny or whynot? 3. The story also refers to "residual value." What is residual value? Does this "residual value" referred to by USA Today have the same meaning as the "residual value" used in accounting? Task 19 Plant Assets For a moment we forget about our friends at Bookmarker and go one step back in the value c chain to look at the book printer 'Smeets Printing'. On January 1, 2018, Smeets Printing has bought a machine that improved both the speed of printing as well as the quality of the printed books. The price of the machine was €2,000,000 with an estimated useful life of 10 years and an estimated residual value of €100,000. In addition to the purchase price, Smeets Printing spent €20,000 for shipping and installation and €25,000 to calibrate the machine prior to use. The company expects that 80,000 books will be printed in each of the first 5 years with this machine and 60,000 books in each of the last 5 years. The controller of Smeets Printing: 1) Prepares the journal entries to record the acquisition costs. 2) Has to decide which depreciation method the company will use for this machine. He works out the different scenarios (straight-line, Declining-balance, and units-of- activity) and makes the calculations. 3) In your opinion, which depreciation method should the company use? During the following years, the following scenarios take place (assume that the scenarios are independent of each other) and the controller of Smeets Printing records these: MacBook Air 000 O00 F4 F5 F7 F8 61 OLI LL V % * 2$ 0b 6 V 8A L 90

+ |I comparableFord FocusS ElecuTc automobler wny or whynot? 3. The story also refers to "residual value." What is residual value? Does this "residual value" referred to by USA Today have the same meaning as the "residual value" used in accounting? Task 19 Plant Assets For a moment we forget about our friends at Bookmarker and go one step back in the value c chain to look at the book printer 'Smeets Printing'. On January 1, 2018, Smeets Printing has bought a machine that improved both the speed of printing as well as the quality of the printed books. The price of the machine was €2,000,000 with an estimated useful life of 10 years and an estimated residual value of €100,000. In addition to the purchase price, Smeets Printing spent €20,000 for shipping and installation and €25,000 to calibrate the machine prior to use. The company expects that 80,000 books will be printed in each of the first 5 years with this machine and 60,000 books in each of the last 5 years. The controller of Smeets Printing: 1) Prepares the journal entries to record the acquisition costs. 2) Has to decide which depreciation method the company will use for this machine. He works out the different scenarios (straight-line, Declining-balance, and units-of- activity) and makes the calculations. 3) In your opinion, which depreciation method should the company use? During the following years, the following scenarios take place (assume that the scenarios are independent of each other) and the controller of Smeets Printing records these: MacBook Air 000 O00 F4 F5 F7 F8 61 OLI LL V % * 2$ 0b 6 V 8A L 90

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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+ |I comparableFord FocusS ElecuTc automobler wny or whynot? 3. The story also refers to "residual value." What is residual value? Does this "residual value" referred to by USA Today have the same meaning as the "residual value" used in accounting? Task 19 Plant Assets For a moment we forget about our friends at Bookmarker and go one step back in the value c chain to look at the book printer 'Smeets Printing'. On January 1, 2018, Smeets Printing has bought a machine that improved both the speed of printing as well as the quality of the printed books. The price of the machine was €2,000,000 with an estimated useful life of 10 years and an estimated residual value of €100,000. In addition to the purchase price, Smeets Printing spent €20,000 for shipping and installation and €25,000 to calibrate the machine prior to use. The company expects that 80,000 books will be printed in each of the first 5 years with this machine and 60,000 books in each of the last 5 years. The controller of Smeets Printing: 1) Prepares the journal entries to record the acquisition costs. 2) Has to decide which depreciation method the company will use for this machine. He works out the different scenarios (straight-line, Declining-balance, and units-of- activity) and makes the calculations. 3) In your opinion, which depreciation method should the company use? During the following years, the following scenarios take place (assume that the scenarios are independent of each other) and the controller of Smeets Printing records these: MacBook Air 000 O00 F4 F5 F7 F8 61 OLI LL V % * 2$ 0b 6 V 8A L 90
Transcribed Image Text:+ |I comparableFord FocusS ElecuTc automobler wny or whynot? 3. The story also refers to "residual value." What is residual value? Does this "residual value" referred to by USA Today have the same meaning as the "residual value" used in accounting? Task 19 Plant Assets For a moment we forget about our friends at Bookmarker and go one step back in the value c chain to look at the book printer 'Smeets Printing'. On January 1, 2018, Smeets Printing has bought a machine that improved both the speed of printing as well as the quality of the printed books. The price of the machine was €2,000,000 with an estimated useful life of 10 years and an estimated residual value of €100,000. In addition to the purchase price, Smeets Printing spent €20,000 for shipping and installation and €25,000 to calibrate the machine prior to use. The company expects that 80,000 books will be printed in each of the first 5 years with this machine and 60,000 books in each of the last 5 years. The controller of Smeets Printing: 1) Prepares the journal entries to record the acquisition costs. 2) Has to decide which depreciation method the company will use for this machine. He works out the different scenarios (straight-line, Declining-balance, and units-of- activity) and makes the calculations. 3) In your opinion, which depreciation method should the company use? During the following years, the following scenarios take place (assume that the scenarios are independent of each other) and the controller of Smeets Printing records these: MacBook Air 000 O00 F4 F5 F7 F8 61 OLI LL V % * 2$ 0b 6 V 8A L 90
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