**Exercise: Depreciation Calculation****Scenario:**Apex Fitness Club uses straight-line depreciation for a machine costing $27,450, with an estimated four-year life and a $2,050 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 $1,600 salvage value.**Tasks:**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.**Instructions:**Complete this question by entering your answers in the tabs below.**Tab: Required 1**- **Objective:** Compute the machine’s book value at the end of its second year. - **Note:** Do not round intermediate calculations. Round your final answers to the nearest whole dollar.**Table: Book Value at the End of Year 2**| Description | Amount ||------------------------------------------|-----------|| Cost | [Input] || Accumulated depreciation 2 years | [Input] || Book value at point of revision | $0 |Switch to the next tab to complete **Required 2**. **Educational Content: Calculation of Revised Depreciation Using Straight-Line Method**Apex Fitness Club applies the straight-line depreciation method for a machine purchased at $27,450, initially estimated to have a four-year lifespan with a salvage value of $2,050. At the start of the third year, Apex estimates the machine has an additional three years of useful life remaining, with an adjusted salvage value of $1,600.**Tasks:**1. **Calculate the Machine's Book Value at the End of Its Second Year.**2. **Determine the Depreciation Amount for Each of the Final Three Years Based on Revised Estimates.****Instructions:**Input your answers in the provided spaces. Ensure to round off your final answers to the nearest whole dollar and do not round intermediate calculations.**Depreciation Calculation Table:**- **Book Value at Point of Revision:** [Enter value]- **Revised Salvage Value:** [Enter value]- **Remaining Depreciable Cost:** [Enter value]- **Years of Life Remaining:** 3- **Revised Annual Depreciation (Years 3-5):** [Enter value]### Process:To compute the Revised Depreciation:1. **Book Value at Revision:** Determine the book value by subtracting two years of accumulated depreciation from the initial cost.2. **Revised Salvage Value:** Update the salvage value as given.3. **Remaining Depreciable Cost:** Calculate by subtracting the revised salvage value from the book value at the point of revision.4. **Revised Annual Depreciation:** Divide the remaining depreciable cost by the new estimated remaining useful life (three years).Follow these steps to determine the accurate depreciation for the machine over the extended period.

Name: **Exercise: Depreciation Calculation****Scenario:**Apex Fitness Club
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Description: **Exercise: Depreciation Calculation****Scenario:**Apex Fitness Club uses straight-line depreciation for a machine costing $27,450, with an estimated four-year life and a $2,050 salvage value. At the beginning of the third year, Apex determines that

Depreciation :— It is decrease in the value of assets due to continuos use of asset. Straight…

Business

Accounting

Apex Fitness Club uses straight-line depreciation for a machine costing $27,450, with an estimated four-year life and a $2,050 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 $1,600 salvage value. 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 machine's book value at the end of its second year. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar.) Book Value at the End of Year 2: Cost Accumulated depreciation 2 years Book value at point of revision $ < Required 1 Required 2 >

Apex Fitness Club uses straight-line depreciation for a machine costing $27,450, with an estimated four-year life and a $2,050 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 $1,600 salvage value. 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 machine's book value at the end of its second year. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar.) Book Value at the End of Year 2: Cost Accumulated depreciation 2 years Book value at point of revision $ < Required 1 Required 2 >

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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