Apex Fitness Club uses straight-line depreciation for a machine costing $19,250, with an estimated four-year life and a $2,550 salvage value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which it will have an estimated $2,100 salvage value. Required: 1. Compute the machine's book value at the end of its second year. 2. Compute the amount of depreciation for each of the final three years given the revised estimates. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the amount of depreciation for each of the final three years given the revised estimates. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Revised Depreciation (Years 3-5) Book value at point of revision Revised salvage value Remaining depreciable cost Years of life remaining Revised annual depreciation years 3-5
Apex Fitness Club uses straight-line depreciation for a machine costing $19,250, with an estimated four-year life and a $2,550 salvage value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which it will have an estimated $2,100 salvage value. Required: 1. Compute the machine's book value at the end of its second year. 2. Compute the amount of depreciation for each of the final three years given the revised estimates. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the amount of depreciation for each of the final three years given the revised estimates. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Revised Depreciation (Years 3-5) Book value at point of revision Revised salvage value Remaining depreciable cost Years of life remaining Revised annual depreciation years 3-5
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:Apex Fitness Club uses straight-line depreciation for a machine costing $19,250, with an estimated four-year life and a $2,550 salvage
value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which it
will have an estimated $2,100 salvage value.
Required:
1. Compute the machine's book value at the end of its second year.
2. Compute the amount of depreciation for each of the final three years given the revised estimates.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Compute the amount of depreciation for each of the final three years given the revised estimates. (Do not round intermediate
calculations. Round your answers to the nearest whole dollar.)
Revised Depreciation (Years 3-5)
Book value at point of revision
Revised salvage value
Remaining depreciable cost
Years of life remaining
Revised annual depreciation years 3-5
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