As of January 1, Year One, Company Z has no liabilities and only two assets: a donut maker with a net book value of $300,000 (and a fair value of $360,000) and a cookie machine with a net book value of $400,000 (and a fair value of $440,000). Each of these assets has a remaining useful life of ten years and no expected residual value. Company A offers $1 million to acquire all of the ownership of Company Z. The owners of Company Z hold out and manage to get $1.2 million in cash. What depreciation/amortization expense will Company A recognize in connection with these acquired assets at the end of Year One? Put responses in the correct input to answer the question. Select a response, navigate to the desired input and insert the response. Responses can be selected and inserted using the space bar, enter key, left mouse button or touchpad. Responses can also be moved by dragging with a mouse. The journal entry to be recorded by Company A for this acquisition is: Debit Response area Debit Response area Debit Response area Credit Response area The journal entry to be recorded by Company A for depreciation/amortization of acquired assets in Year One is: Debit Response area Credit Response area Credit Response area
As of January 1, Year One, Company Z has no liabilities and only two assets: a donut maker with a net book value of $300,000 (and a fair value of $360,000) and a cookie machine with a net book value of $400,000 (and a fair value of $440,000). Each of these assets has a remaining useful life of ten years and no expected residual value. Company A offers $1 million to acquire all of the ownership of Company Z. The owners of Company Z hold out and manage to get $1.2 million in cash. What depreciation/amortization expense will Company A recognize in connection with these acquired assets at the end of Year One? Put responses in the correct input to answer the question. Select a response, navigate to the desired input and insert the response. Responses can be selected and inserted using the space bar, enter key, left mouse button or touchpad. Responses can also be moved by dragging with a mouse. The journal entry to be recorded by Company A for this acquisition is: Debit Response area Debit Response area Debit Response area Credit Response area The journal entry to be recorded by Company A for depreciation/amortization of acquired assets in Year One is: Debit Response area Credit Response area Credit Response area
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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As of January 1, Year One, Company Z has no liabilities and only two assets: a donut maker with a net book value of $300,000 (and a fair value of $360,000) and a cookie machine with a net book value of $400,000 (and a fair value of $440,000). Each of these assets has a remaining useful life of ten years and no expected residual value. Company A offers $1 million to acquire all of the ownership of Company Z. The owners of Company Z hold out and manage to get $1.2 million in cash. What depreciation /amortization expense will Company A recognize in connection with these acquired assets at the end of Year One?
Put responses in the correct input to answer the question. Select a response, navigate to the desired input and insert the response. Responses can be selected and inserted using the space bar, enter key, left mouse button or touchpad. Responses can also be moved by dragging with a mouse.
The journal entry to be recorded by Company A for this acquisition is:
Debit Response area
Debit Response area
Debit Response area
Credit Response area
The journal entry to be recorded by Company A for depreciation/amortization of acquired assets in Year One is:
Debit Response area
Credit Response area
Credit Response area
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