Please help me Buch Company acquired a piece ofequipment in Year 1 at a cost of$100,000. The equipment has a 10-year estimated life, zero salvage value,and is depreciated on a straight-linebasis. Technological innovations takeplace in the industry in which thecompany operates in Year 3. Buchgathers the following information forthis piece of equipment at the end ofYear 3: Expected future undiscountedcash flows - $75,000 Present value ofexpected future cash flows - $55,000Net selling price - $63,000 What is theimpairment loss under U.S. GAAP?Question 8 options: $0.$15,000.$7,000.$9,000.

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Description: Please help me Buch Company acquired a piece ofequipment in Year 1 at a cost of$100,000. The equipment has a 10-year estimated life, zero salvage value,and is depreciated on a straight-linebasis. Technological innovations takeplace in the industry in

Impairment losses are significant in financial reporting because they represent the conservative…

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Buch Company acquired a piece of equipment in Year 1 at a cost of $100,000. The equipment has a 10-

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter9: Depreciation (deprec)

Section: Chapter Questions

Problem 1R: Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an...

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Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an estimated useful life of four years or 100,000 hours, and a salvage value of 30,000. This machine will be used 30,000 hours during Year 1, 20,000 hours in Year 2, 40,000 hours in Year 3, and 10,000 hours in Year 4. Dunedin buys equipment frequently and wants to print a depreciation schedule for each assets life. Review the worksheet called DEPREC that follows these requirements. Since some assets acquired are depreciated by straight-line, others by units of production, and others by double-declining balance, DEPREC shows all three methods. You are to use this worksheet to prepare depreciation schedules for the new machine.
When depreciation is recorded each period, what account is debited? a. Depreciation Expense b. Cash c. Accumulated Depreciation d. The fixed asset account involved Use the following information for Multiple-Choice Questions 7-4 through 7-6: Cox Inc. acquired a machine for on January 1, 2019. The machine has a salvage value of $20,000 and a 5-year useful life. Cox expects the machine to run for 15,000 machine hours. The machine was actually used for 4,200 hours in 2019 and 3,450 hours in 2020.
IMPACT OF IMPROVEMENTS AND REPLACEMENTS ON THE CALCULATION OF DEPRECIATION On January 1, 20-1, Dans Demolition purchased two jackhammers for 2,500 each with a salvage value of 100 each and estimated useful lives of four years. On January 1, 20-2, a stronger blade to improve performance was installed in Jackhammer A for 800 cash and the compressor was replaced in Jackhammer B for 200 cash. The compressor is expected to extend the life of Jackhammer B one year beyond the original estimate. REQUIRED 1. Using the straight-line method, prepare general journal entries for depreciation on December 31, 20-1, for Jackhammers A and B. 2. Enter the transactions for January 20-2 in a general journal. 3. Assuming no other additions, improvements, or replacements, calculate the depreciation expense for each jackhammer for 20-2 through 20-4.
Urquhart Global purchases a building to house its administrative offices for $500,000. The best estimate of the salvage value at the time of purchase was $45,000, and it is expected to be used for forty years. Urquhart uses the straight-line depreciation method for all buildings. After ten years of recording depreciation, Urquhart determines that the building will be useful for a total of fifty years instead of forty. Calculate annual depreciation expense for the first ten years. Determine the depreciation expense for the final forty years of the assets life, and create the journal entry for year eleven.
A truck was recently purchased for 75,000 with a salvage value of 5,000 and an estimated useful life of eight years or 150,000 miles (24,000 miles per year for the first five years and 10,000 miles per year after that). Enter the new information in the Data Section of the worksheet. Again, make sure the totals for all three methods are in agreement. Print the worksheet. Save this new data as DEPREC5.
Colquhoun International purchases a warehouse for $300,000. 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. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assets life, and create the journal entry for year five.
An assembly line conveyor system with a 5-year life is to be depreciated by the DDB method. The conveyor units had a first cost of $30,000 with a$9000 salvage value. The annual operating cost allocated to the conveyor is $7000 per year. The book value at the end of year 2 is closest to:a. $6,480b. $10,800c. $12,400d. $18,000
An asset for drilling was purchased and placed in service by a petroleum production company. Its cost basis is $60,000 and it has an estimated Market Value (Salvage Value) of $12,000 at the end of an estimated useful life of 14 years. Compute for the depreciation amount in the third year and the BV at the end of the 5th year of the life by each of these methods. (No need to Solve all years, show your solution) a. The straight line method b. the SYD method c. The 200% declining-balance method.
Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below] On April 1, Cyclone Company purchases a trencher for $300,000. The machine is expected to last five years and have a salvage value of $50,000 Exercise 8-12 (Algo) Double-declining-balance, partial-year depreciation LO C2 Compute depreciation expense at December 31 for both the first year and second year assuming the company uses the double- declining-balance method Note: Enter all amounts as positive values. Annual Period Beginning of Period Book - Value Year 1 Year 2 Depreciation for the Period Depreciation Partial Rate Year Depreciation Expense Accumulated Depreciation 5 End of Period $ Book Value 05 0 $ 0 0 3
Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] On April 1, Cyclone Company purchases a trencher for $320,000. The machine is expected to last five years and have a salvage value of $60,000. Exercise 10-12 (Algo) Double-declining-balance, partial-year depreciation LO C2 Compute depreciation expense at December 31 for both the first year and second year assuming the company uses the double- declining-balance method. Note: Enter all amounts as positive values. Year 1 Year 2 Annual Period Beginning of Period Book Value Depreciation for the Periodi Depreciation Partial Rate Year Depreciation Expense End of Period Accumulated Depreciation $ $ Book Value 05 0 $ 0 0
Required information Use the following information for the Exercises below. (Static) [The following information applies to the questions displayed below] On April 1, Cyclone Company purchases a trencher for $280,000. The machine is expected to last five years and have a salvage value of $40,000. Exercise 8-12 (Static) Double-declining-balance, partial-year depreciation LO C2 Compute depreciation expense at December 31 for both the first year and second year assuming the company used the double- declining-balance method. Note: Enter all amounts as positive values. Annual Period Beginning of Period Book Value Year 1 Year 2 Depreciation for the Period Depreciation Rate Partial Year Depreciation Expense End of Period Accumulated Depreciation Book Value
Current Attempt in Progress Equipment was acquired on January 1, 2025 at a cost of $168,000. The equipment was originally estimated to have a salvage value of $8,800 and an estimated life of 10 years. Depreciation has been recorded through December 31, 2027 using the straight-line method. On January 1, 2028, the estimated salvage value was revised to $14,800 and the useful life was revised to a total of 8 years. Prepare the journal entry to record depreciation expense for 2028. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Depreciation expense for 2028 $ Adjusting journal entry at 12/31/28: Date Dec. 31 Account Titles and Explanation Debit Credit