Brunswick Manufacturing owns one piece of equipment. The equipment was purchased on January 1, 2019 for $1,500,000, it has an estimated useful life of 8 years, and an estimated salvage value of $200,000. Brunswick depreciates the equipment using the double (200%) declining balance method. The equipment line on Brunswick's balance sheet at December 31, 2022 is shown below. Equipment, less accumulated depreciation of $867,188, respectively and December 31 2021 2022 $ 632,813

Brunswick Manufacturing owns one piece of equipment. The equipment was purchased on January 1, 2019 for $1,500,000, it has an estimated useful life of 8 years, and an estimated salvage value of $200,000. Brunswick depreciates the equipment using the double (200%) declining balance method. The equipment line on Brunswick's balance sheet at December 31, 2022 is shown below. Equipment, less accumulated depreciation of $867,188, respectively and December 31 2021 2022 $ 632,813

Name: Brunswick Manufacturing owns one piece of equipment. The equipment wa
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Description: Brunswick Manufacturing owns one piece of equipment. The equipment was purchased on January 1,2019 for $1,500,000, it has an estimated useful life of 8 years, and an estimated salvage value of$200,000. Brunswick depreciates the equipment using the d

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Problem 1Q

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Concept explainers

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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Question

Brunswick Manufacturing owns one piece of equipment. The equipment was purchased on January 1,
2019 for $1,500,000, it has an estimated useful life of 8 years, and an estimated salvage value of
$200,000. Brunswick depreciates the equipment using the double (200%) declining balance method.
The equipment line on Brunswick's balance sheet at December 31, 2022 is shown below.
Equipment, less accumulated depreciation of
$867,188, respectively
and
December 31
2021
2022
a. What will be the depreciation expense for the year ended December 31, 2022?
b. Complete the balance sheet disclosures above for the year ended December 31, 2022 by
filling in the two boxes
$ 632,813

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