Exercise 8-10A Computing and recording straight-line versus double-declining-balance depreciation At the beginning of 2011, Precision Manufacturing purchased a new computerized drill press for $50,000. It is expected to have a five-year life and a $5,000 salvage value. Required a. Compute the depreciation for each of the five years, assuming that the company uses (1) Straight-line depreciation. (2) Double-declining-balance depreciation. b. Record the purchase of the drill press and the depreciation expense for the first year under the straight-line and double-declining-balance methods in a financial statements model like the following one: Cash + Assets Book Value of Drill Press = Equity Rev. Ret. Earn. - Exp. c. Prepare the journal e ntries to recognize depreciation for each of the five years, assuming that the company uses (1) Straight-line depreciation. (2) Double-declining-balance depreciation. = LO 3 Net Inc. Cash Flow

Exercise 8-10A Computing and recording straight-line versus double-declining-balance depreciation At the beginning of 2011, Precision Manufacturing purchased a new computerized drill press for $50,000. It is expected to have a five-year life and a $5,000 salvage value. Required a. Compute the depreciation for each of the five years, assuming that the company uses (1) Straight-line depreciation. (2) Double-declining-balance depreciation. b. Record the purchase of the drill press and the depreciation expense for the first year under the straight-line and double-declining-balance methods in a financial statements model like the following one: Cash + Assets Book Value of Drill Press = Equity Rev. Ret. Earn. - Exp. c. Prepare the journal e ntries to recognize depreciation for each of the five years, assuming that the company uses (1) Straight-line depreciation. (2) Double-declining-balance depreciation. = LO 3 Net Inc. Cash Flow

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Description: Exercise 8-10A Computing and recording straight-line versusdouble-declining-balance depreciationAt the beginning of 2011, Precision Manufacturing purchased a new computerized drill press for$50,000. It is expected to have a five-year life and a $5,0

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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On February 2, 2022, Alexandra purchases a personal computer. The computer cost $4,920. Alexandra uses the computer 85 percent of the time in her accounting business, and the remaining 15 percent of the time for various personal uses. Calculate Alexandra's maximum depreciation deduction for 2022 for the computer, assuming half-year convention and she does not use bonus depreciation or make the election to expense. Click here to access the depreciation table. If required, round your answer to nearest dollar.
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