Cullumber Company purchased a new machine on October 1, 2022, at a cost of $110,000. The company estimated that the machinewill have a salvage value of $10,000. The machine is expected to be used for 10,000 working hours during its 5-year life.(a)Your answer is correct.Compute the depreciation expense under straight-line method for 2022.2022Depreciation expense2$5000eTextbook and MediaAttempts: unlimited Compute the depreciation expense under units-of-activity for 2022, assuming machine usage was 1,500 hours. (Rounddepreciable cost per unit to 2 decimal places, e.g. O.50 and final answer to O decimal places, e.g. 2,125.)2022Depreciation expense2$15000eTextbook and MediaAttempts: unlimited(c)X Your answer is incorrect.Compute the depreciation expense under declining-balance using double the straight-line rate for 2022 and 2023.20222023Depreciation expense$15000$15000eTextbook and Media

Name: Cullumber Company purchased a new machine on October 1, 2022, at a co
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: Cullumber Company purchased a new machine on October 1, 2022, at a cost of $110,000. The company estimated that the machinewill have a salvage value of $10,000. The machine is expected to be used for 10,000 working hours during its 5-year life.(a)Yo

Double declining depreciation rate = Straight line depreciation rate x 2 = (100/5 years) x 2 = 40%Depreciation for the year 2022 = Cost of the assets x depreciation rate = $110,000 x 40% = $44,000 Depreciation for the year 2023 = (Cost of the assets - Depreciation for the year 2022) x depreciation rate = ($110,000 - $44,000) x 40% = $26,400

Business

Accounting

Cullumber Company purchased a new machine on October 1, 2022, at a cost of $110,000. The company estimated that the machine will have a salvage value of $10,000. The machine is expected to be used for 10,000 working hours during its 5-year life.

Cullumber Company purchased a new machine on October 1, 2022, at a cost of $110,000. The company estimated that the machine will have a salvage value of $10,000. The machine is expected to be used for 10,000 working hours during its 5-year life.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Tesla purchased an auto-piloting system for $10,000,000 on January 1, 2016. It expects to use the…

A: Depreciation Expense = Cost of asset - Salvage valueEstimated useful life…

Q: Montello Inc. purchases a delivery truck for $14,000. The truck has a salvage value of $2,000 and is…

A: 1. DEPRECIABLE VALUE : = COST - SALVAGE VALUE = $14,000 - $2,000 = $12,000 2. DEPRECIATION…

Q: Windsor, Inc. purchased a new machine on October 1, 2022, at a cost of $120,000. The company…

A: Depreciation can be charged on a fixed asset using many methods like straight line method, double…

Q: Buhner Company constructed a building at a cost of $3,000,000 and occupied it beginning in January…

A: Formula:

Q: Whispering Winds Corp. purchased a new machine on October 1, 2022, at a cost of $123,000. The…

A: In case of machine hours is givn ,then depreciation per machine hour:- =(Cost-salvage…

Q: Hardy HarHar purchases a new equipment with a cost of $55,000 on March 1, 2020. They estimate the…

A: Cost = 55000 Salvage Value = 5000 Depreciable value = Cost - Salvage Value = 55000 - 5000 = 50000…

Q: Mohr Company purchases a machine at the beginning of the year at a cost of $34,000. The machine is…

A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…

Q: Compute the annual depreciation to be charged, beginning with 2019. Annual depreciation…

A: Depreciation is recorded on the cost of fixed assets to record a reduction in value. It can be…

Q: A piece of equipment bought for $104,000 is expected to have a $2,000 salvage value at the end of…

Q: Union Industries purchased equipment for $86,000 on January 1st, 2022. The useful life of the…

A: Depreciation is a reduction in value of asset due to wear and tear, technological advancement, other…

Q: 1. Rufiel Corporation purchased a new machine on January 1, 2023. The machine cost $300,000 and had…

A: The straight-line method of depreciation spreads the cost of the asset evenly over its useful life.…

Q: A new CNC machine is purchased for $40,000. The salvage value of the CNC machine is expected to be…

A: The modified accelerated rate of depreciation(MACRS) is the rate of depreciation used for…

Q: A truck was acquired on July 1, 2023, for $189,000. The truck had a six-year useful life and an…

A: The objective of the question is to calculate the depreciation expense for the truck for the year…

Q: Compute the depreciation expense under declining-balance using double the straight-line rate for…

A: Under the double declining method of depreciation, the book value at the beginning of year is…

Q: In 1990, Sheridan Company completed the construction of a building at a cost of $860,000 and first…

Q: On January 1 of 2020, Miners, Inc. bought a backhoe for $75,000. The backhoe is estimated to last 5…

A: Depreciation Due to the usage and life year passes machines are reduced by their cost from the…

Q: Sunland Company bought a machine on January 1, 2022. The machine cost $168000 and had an expected…

A: Annual Depreciation (straight line method) = (Cost of the assets - Residual value) / Expected life…

Q: A machine costing $55,000.00 was purchased January 2, 2021. The machine is expected to have…

A: DEPRECIATION EXPENSE Depreciation means gradual decrease in the value of an asset due to normal wear…

Q: Macintosh Printing, Inc., purchased a $20,000 printing machine two years ago. The company expected…

A: Cost of machine = $20,000 Expected life = 7 year Salvage value = $5000 Last year repairs = $5000 Per…

Q: The cost of equipment purchased by Charleston, Inc., on January 1, 2020, is $89,000. It is estimated…

A: Depreciation is the systematic decrease in the reported value of an asset throughout its useful life…

Q: Bridgeport Manufacturing purchased a machine on January 1, 2023 for use in its factory. Bridgeport…

A: Depreciation expense :— It is the allocation of depreciable cost of asset over the estimated useful…

Q: On January 1, 2024, Nash Company, a small machine-tool manufacturer, acquired for $1,190,000 a piece…

A: Depreciation is defined as the accounting method implemented to allocate the cost of a long-term…

Q: Sweet Manufacturing purchased a machine on August 1, 2023 for use in its factory. Sweet paid…

A: Capital cost allowance is allocating the cost of assets as depreciation during the years it…

Q: A new van costs $25,000, has an estimated useful life of five years and an estimated salvage value…

A: Formula: Straight line method depreciation = ( Asset cost - Salvage value ) / Useful life years

Q: In 1993, Concord Company completed the construction of a building at a cost of $ 2,100,000 and fırst…

A: Annual depreciation from 2004 through 2021: $67720/yr

Q: Wardell Company purchased a minicomputer on January 1, 2022, at a cost of $57,000. The computer was…

A: To record depreciation expense, the depreciation expense account is debited and accumulated…

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.

Topic Video

Question

Cullumber Company purchased a new machine on October 1, 2022, at a cost of $110,000. The company estimated that the machine
will have a salvage value of $10,000. The machine is expected to be used for 10,000 working hours during its 5-year life.
(a)
Your answer is correct.
Compute the depreciation expense under straight-line method for 2022.
2022
Depreciation expense
2$
5000
eTextbook and Media
Attempts: unlimited

Compute the depreciation expense under units-of-activity for 2022, assuming machine usage was 1,500 hours. (Round
depreciable cost per unit to 2 decimal places, e.g. O.50 and final answer to O decimal places, e.g. 2,125.)
2022
Depreciation expense
2$
15000
eTextbook and Media
Attempts: unlimited
(c)
X Your answer is incorrect.
Compute the depreciation expense under declining-balance using double the straight-line rate for 2022 and 2023.
2022
2023
Depreciation expense
$
15000
$
15000
eTextbook and Media

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Working:

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

In 1998, Novak Company completed the construction of a building at a cost of $2,500,000 and first occupied it in January 1999. It was estimated that the building will have a useful life of 40 years and a salvage value of $76,000 at the end of that time. Early in 2009, an addition to the building was constructed at a cost of $625,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $25,000. In 2027, it is determined that the probable life of the building and addition will extend to the end of 2058, or 20 years beyond the original estimate. (a) Using the straight-line method, compute the annual depreciation that would have been charged from 1999 through 2008. Annual depreciation from 1999 through 2008 $ GA /yr.
On April 17, 2024, the Loadstone Mining Company purchased the rights to a copper mine. The purchase price plus additional costs necessary to prepare the mine for extraction of the copper totaled $5,200,000. The company expects to extract 1,040,000 tons of copper during a four-year period. During 2024, 254,000 tons were extracted and sold immediately. Required: Calculate depletion for 2024. Is depletion considered part of the product cost and included in the cost of inventory?
In 1993, Concord Company completed the construction of a building at a cost of $ 2,100,000 and first occupied it in January 1994. It was estimated that the building will have a useful life of 40 years and a salvage value of $ 63,200 at the end of that time. Early in 2004, an addition to the building was constructed at a cost of $ 525,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $ 21,000. In 2022, it is determined that the probable life of the building and addition will extend to the end of 2053, or 20 years beyond the original estimate.
Grove Company acquired a production machine on January 1, 2022, at a cost of $540,000. The machine is expected to have a four- year useful life, with a salvage value of $104,000. The machine is capable of producing 74,000 units of product in its lifetime. Actual production was as follows: 16,280 units in 2022; 23,680 units in 2023; 20,720 units in 2024; 13,320 units in 2025. Following is the comparative balance sheet presentation of the net book value of the production machine at December 31 for each year of the asset's life, using three alternative depreciation methods (items a to c): Required: Identify the depreciation method used for each of the following comparative balance sheet presentations (items a to c). If a declining- balance method is used, be sure to indicate the percentage (150% or 200%). (Hint: Read the balance sheet from right to left to determine how much has been depreciated each year. Remember that December 31, 2022, is the end of the first year.) a. b. C. Production…
Compute the annual depreciation to be charged, beginning with 2022. (Round answer to O decimal places, e.g. 45,892.) Annual depreciation expense-building %24
Cullumber Company purchased a new machine on October 1, 2022, at a cost of $110,000. The company estimated that the machine will have a salvage value of $10,000. The machine is expected to be used for 10,000 working hours during its 5-year life. (a) Your answer is correct. Compute the depreciation expense under straight-line method for 2022. 2022 Depreciation expense 5000 eTextbook and Media Attempts: unlimited %24
On March 1, 2024, a company entered into an agreement with the state to obtain the rights to operate a mineral mine for $6 million. The mine is expected to produce 155,000 tons of mineral. As part of the agreement, the company agrees to restore the land to its original condition after mining operations are completed in approximately five years. Management has provided the following possible outflows for the restoration costs that will occur five years from now: (PV of $1. PVA of $1) Cash Outflow $ 520,000 675,000 830,000 Probability 20% 30% 50% The company's credit-adjusted risk-free interest rate is 9%. During 2024, the company extracted 27,900 tons of ore from the mine. How much accretion expense will the company record in its income statement for the 2024 calendar year? Multiple Choice
In 1990, Sunland Company completed the construction of a building at a cost of $880,000 and first occupied it in January 1991. It was estimated that the building would have a useful life of 40 years and a salvage value of $26,000 at the end of that time. Early in 2001, an addition to the building was constructed at a cost of $220,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $9,000. In 2019, it is determined that the probable life of the building and addition will extend to the end of 2050, or 20 years beyond the original estimate. Compute the annual depreciation that would have been charged from 2001 through 2018. Annual depreciation from 2001 through 2018 Compute the annual depreciation to be charged, beginning with 2019. Annual depreciation expense—building
XYZ Corporation has purchased a new piece of machinery for $75,000. The piece of equipment should last for 8 years and will have a $5,000 salvage value at the end of its useful life. They plan on using the unit-of-production depreciation method. Use the production information below to calculate the estimated depreciation information for each year. Year Units Produced 1 8,000 2 10,000 3 12,000 4 14,000 5 12,000 6 10,000 7 8,000 8 5,000
In 1990, Sheridan Company completed the construction of a building at a cost of $860,000 and fırst occupied it in January 1991. It was estimated that the building would have a useful life of 40 years and a salvage value of $26,000 at the end of that time. Early in 2001, an addition to the building was constructed at a cost of $215,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $9,000. In 2019, it is determined that the probable life of the building and addition will extend to the end of 2050, or 20 years beyond the original estimate. (a) Using the straight-line method, compute the annual depreciation that would have been charged each year from 1991 through 2000. Annual depreciation from 1991 through 2000 $ / yr %24
Da
[The following information applies to the questions displayed below] On January 1, 2024, the Excel Delivery Company purchased a delivery van for $33,000. At the end of its five-year service life, it is estimated that the van will be worth $3,000. During the five-year period, the company expects to drive the van 100,000 miles. Required: Calculate annual depreciation for the five-year life of the van using each of the following methods. 1. Straight line. Answer is complete but not entirely correct. Straight-line $ 30,000 per year