Depreciation by different methods, and sale of a fixed asset New machines were purchased by Nunez Co. on January 1 for $300,000. The equipment was expected to have a useful life of four years and an estimated salvage value of $40,000. Required: 1. Determine the annual depreciation expense for each of the four years under A. The Straight-line method Year 1 Year 2 Year 3 Year 4 B. The double-declining balance method Beg. BV DDB% Dep. Exp. End. BV Year 1 Year 2 Year 3 Year 4 2. Journalize the entry for the first year assuming the straightline method. (Select the account from the dropdown menu) Date Accounts and Explanations Debit Credit 3. Journalize the sale of the machine if it was sold at the end of the third year for $100,000. (Select the account from the dropdown menu) (Assume the straight-line method of depreciation was used) Date Accounts and Explanations Debit Credit

Depreciation by different methods, and sale of a fixed asset New machines were purchased by Nunez Co. on January 1 for $300,000. The equipment was expected to have a useful life of four years and an estimated salvage value of $40,000. Required: 1. Determine the annual depreciation expense for each of the four years under A. The Straight-line method Year 1 Year 2 Year 3 Year 4 B. The double-declining balance method Beg. BV DDB% Dep. Exp. End. BV Year 1 Year 2 Year 3 Year 4 2. Journalize the entry for the first year assuming the straightline method. (Select the account from the dropdown menu) Date Accounts and Explanations Debit Credit 3. Journalize the sale of the machine if it was sold at the end of the third year for $100,000. (Select the account from the dropdown menu) (Assume the straight-line method of depreciation was used) Date Accounts and Explanations Debit Credit

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Description: Depreciation by different methods, and sale of a fixed asset New machines were purchased by Nunez Co. on January 1 for $300,000. The equipment was expected to have a useful life of four years and an estimated salvag

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Depreciation by different methods, and sale of a fixed asset

New machines were purchased by Nunez Co. on January 1 for $300,000. The equipment was

expected to have a useful life of four years and an estimated salvage value of $40,000.

Required:

1. Determine the annual depreciation expense for each of the four years under

A. The Straight-line method

Year 1

Year 2

Year 3

Year 4

B. The double-declining balance method

Beg. BV

DDB%

Dep. Exp.

End. BV

Year 1

Year 2

Year 3

Year 4

2. Journalize the entry for the first year assuming the straightline method. (Select the account from the dropdown menu)

Date

Accounts and Explanations

Debit

Credit

3. Journalize the sale of the machine if it was sold at the end of the third year for $100,000. (Select the account from the dropdown menu)

(Assume the straight-line method of depreciation was used)

Date

Accounts and Explanations

Debit

Credit

Expert Solution

Step 1

Depreciation is considered as an expense charge on the value of the Asset. It can be calculated by using different methods straight-line method, the double decline method, the sum of the year's digits method, etc.

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