Assume that Brown's Salvage Company paid $30,000 for equipment with a 10-year life and zero expected residual value. After using the equipment for four years, the company determines that the asset will remain useful for only three more years. Read the requirements. Requirement 1. Record depreciation expense on the equipment for year 5 by the straight-line method. First, select the formula to calculate the company's revised depreciation expense on the equipment for year 5. Then enter the amounts and calculate the depreciation for year 5. (Enter "0" for items with a zero value.) ( Record the depreciation on the equipment for year 5. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Accounts and Explanation Debit Credit Date Revised depreciation Requirement 2. What is accumulated depreciation at the end of year 5? The accumulated depreciation at the end of year 5 is $

Assume that Brown's Salvage Company paid $30,000 for equipment with a 10-year life and zero expected residual value. After using the equipment for four years, the company determines that the asset will remain useful for only three more years. Read the requirements. Requirement 1. Record depreciation expense on the equipment for year 5 by the straight-line method. First, select the formula to calculate the company's revised depreciation expense on the equipment for year 5. Then enter the amounts and calculate the depreciation for year 5. (Enter "0" for items with a zero value.) ( Record the depreciation on the equipment for year 5. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Accounts and Explanation Debit Credit Date Revised depreciation Requirement 2. What is accumulated depreciation at the end of year 5? The accumulated depreciation at the end of year 5 is $

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Description: Assume that Brown's Salvage Company paid $30,000 for equipment with a 10-year life and zero expected residual value. After using the equipment for four years, the company determines that theasset will remain useful for only three more years.Read the

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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Blue Company purchases equipment on January 1, Year 1, at a cost of $600,000. The asset is expected to have a service life of 12 years and a salvage value of $54,000. Compute the amount of depreciation for each of Years 1 through 3 using the straight-line depreciation method. (Round answers to 0 decimal places, e.g. 5,125.) Depreciation for Year 1 $enter a dollar amount rounded to 0 decimal places Depreciation for Year 2 $enter a dollar amount rounded to 0 decimal places Depreciation for Year 3 $enter a dollar amount rounded to 0 decimal places Compute the amount of depreciation for each of Years 1 through 3 using the sum-of-the-years'-digits method. Depreciation for Year 1 $enter a dollar amount Depreciation for Year 2 $enter a dollar amount Depreciation for Year 3 $enter a dollar amount Part 3 Compute the amount of depreciation for each of Years 1 through 3 using the…
A delivery van costing $35,000 is expected to have a $2,000 salvage value at the end of its useful life of five years. Assume that the truck was purchased on January 1. Compute the annual depreciation expense under the straight‑line depreciation method. (Round your answer to the nearest whole number.)
Oriole Company acquired a plant asset at the beginning of Year 1. The asset has an estimated service life of 5 years. An employee has prepared depreciation schedules for this asset using three different methods to compare the results of using one method with the results of using other methods. You are to assume that the following schedules have been correctly prepared for this asset using (1) the straight-line method, (2) the sum-of-the-years'-digits method, and (3) the double-declining-balance method. Year Straight-Line Sum-of-the-Years'-Digits Double-Declining-Balance 1 $12,600 $21,000 $28,000 2 12,600 16,800 16,800 3 12,600 12,600 10,080 4 12,600 8,400 6,048 5 12,600 4,200 2,072 Total $63,000 $63,000 $63,000 What is the cost of the asset being depreciated? Cost of asset What amount, if any, was used in the depreciation…
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Splish Company purchases equipment on January 1, Year 1, at a cost of $612,000. The asset is expected to have a service life of 12 years and a salvage value of $55,080. (a) Compute the amount of depreciation for each of Years 1 through 3 using the straight-line depreciation method. (Round answers to O decimal places, e.g. 5,125.) Your answer is correct. Depreciation for Year 2 (b) Depreciation for Year 1 Depreciation for Year 3 (c) eTextbook and Media Depreciation for Year 1 Your answer is correct. Depreciation for Year 2 Depreciation for Year 3 $ eTextbook and Media $ $ Compute the amount of depreciation for each of Years 1 through 3 using the sum-of-the-years-digits method. Depreciation for Year 2 $ $ $ Depreciation for Year 1 $ 46,410 $ 46,410 Depreciation for Year 3 $ 46,410 85.680 78.540 Compute the amount of depreciation for each of Years 1 through 3 using the double-declining-balance method. (Round depreciation rate to 2 decimal places, e.g. 15.84% and final answers to 0 decimal…
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On August 3, Cinco Construction purchased special-purpose equipment at a cost of $9,900,000. The useful life of the equipment was estimated to be eight years, with an estimated residual value of $20,000. a. Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the straight-line depreciation method (half-year convention). b. Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the 200 percent declining-balance method (half-year convention) with a switch to straight-line when it will maximize depreciation expense. c. Which of these two depreciation methods (straight-line or double-declining-balance) results in the highest net income for financial reporting purposes during the first two years of the equipment’s use?
Cox Inc. acquired a machine for $410,000 on January 1, Year 1. The machine has a salvage value of $10,000 and a 5-year useful life. Cox expects the machine to run for 10,000 machine hours. The machine was actually used for 1,700 hours in 2019 and 2,000 hours in 2020. What would be the balance in the accumulated depreciation account at the end of the second year, if the straight-line method were used? a.$148,000 b.$160,000 c.$250,000 d.$80,000
Colquhoun International purchases a warehouse for $325,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. A. Calculate annual depreciation expense for the first four years. $fill in the blank b2a4a0fccfb4fa2_1 B. Determine the depreciation expense for the final fifteen years of the asset’s life. $fill in the blank b2a4a0fccfb4fa2_2 C. Prepare the journal entry for year five. If an amount box does not require an entry, leave it blank.
The Masters Corporation purchased a piece of machinery for $300,000. The expected useful life (EUL) of the machine is 10 years. Machinery of this type normally has a salvage value of approximately 17 percent of the purchase price (use $50,000 for salvage value in this case.) Using the accounting/finance functions in Excel, complete the depreciation worksheet in Exercise11.xls in the following steps: 1. Use the following three methods to compute the depreciation in columns B, C, and D: (1) double- declining balance, (2) straight-line, and (3) sum-of-the-years’ digits. Columns F, G, and H should show the book value of each method for the 10 periods (10 years). Formulas should be used in the empty cells so that a change in the cost, salvage value, or expected useful life of the machinery automatically updates the worksheet. 2. PDF page 1: Print cells A8:H20 into one page with proper format. 3. PDF page 2: Print cell formulas in Cells A15:H15. You may edit the cell…
An asset was purchased for $126,000.00 on January 1, Year 1 and originally estimated to have a useful life of 11 years with a residual value of $11,500.00. At the beginning of the third year, it was determined that the remaining useful life of the asset was only 4 years with a residual value of $1,600.00. Calculate the third-year depreciation expense using the revised amounts and straight line method. Select the correct answer. $24,895.45 $25,895.45 $26,895.45 $26,395.45