Gribbons Corp. purchased a machine for processing industrial waste for $45,000 on January 1, 2018. The machine is expected to have a four-year life, with a residual value of $5,000 at the end of four years. Using the sum-of-the years'-digits method, depreciation for 2019 and book value at December 31, 2019, would be: $13,500 and $8,500. $12,000 and $17,000. $13,500 and $13,500. $12,000 and $12,000.

Gribbons Corp. purchased a machine for processing industrial waste for $45,000 on January 1, 2018. The machine is expected to have a four-year life, with a residual value of $5,000 at the end of four years. Using the sum-of-the years'-digits method, depreciation for 2019 and book value at December 31, 2019, would be: $13,500 and $8,500. $12,000 and $17,000. $13,500 and $13,500. $12,000 and $12,000.

Name: Gribbons Corp. purchased a machine for processing industrialwaste for
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Description: Gribbons Corp. purchased a machine for processing industrialwaste for $45,000 on January 1, 2018. The machine is expected tohave a four-year life, with a residual value of $5,000 at the end offour years.Using the sum-of-the years'-digits method, dep

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

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Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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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

Gribbons Corp. purchased a machine for processing industrial
waste for $45,000 on January 1, 2018. The machine is expected to
have a four-year life, with a residual value of $5,000 at the end of
four years.
Using the sum-of-the years'-digits method, depreciation for 2019
and book value at December 31, 2019, would be:
$13,500 and $8,500.
$12,000 and $17,000.
O $13,500 and $13,500.
$12,000 and $12,000.

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