In Year 1, Manny Company purchased a piece of equipment with a cost of 76000 and a useful life of 5 years. At the beginning of Year 3, the company has determined the following: Expected future cash flows $42000 PV of expected future cash flows $37000 Net selling price $38000 Assuming the company used straight-line depreciation and the residual value is 0, what is the depreciation in Years 1 and 2 for US GAAP and IFRS? What is the net carrying amount at the beginning of Year 3 for US GAAP and IFRS? What is the impairment, if any, for US GAAP and IFRS as of the beginning of Year 3?

In Year 1, Manny Company purchased a piece of equipment with a cost of 76000 and a useful life of 5 years. At the beginning of Year 3, the company has determined the following: Expected future cash flows $42000 PV of expected future cash flows $37000 Net selling price $38000 Assuming the company used straight-line depreciation and the residual value is 0, what is the depreciation in Years 1 and 2 for US GAAP and IFRS? What is the net carrying amount at the beginning of Year 3 for US GAAP and IFRS? What is the impairment, if any, for US GAAP and IFRS as of the beginning of Year 3?

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 29CE

See similar textbooks

Similar questions

Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?
Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one it expects to use the truck for 26,000 miles. Calculate the annual depreciation expense.
Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000 hours, the company expects to sell the asset for 150,000. What is the depreciation rate per hour based on activity?
Redtail Hawk Company is evaluating two possible investments in depreciable plant assets. The company uses the straight−line method of depreciation. The following information is available: Investment A Investment B Initial capital investment $17,500 $455,000 Estimated useful life 8 years 8 years Estimated residual value $8,000 $15,000 Estimated annual net cash inflow $7,000 $70,000 Required rate of return 11% 12% How long is the payback period for Investment A?
The XYZ Corporation is investing in a $100,000 piece of machinery with 5-year useful life and $20,000 residual value. a) Using the straight-line method, how much depreciation occurs in year 1? b) Using the double-declining method, how much depreciation occurs in year 1?
Dragonfly, Inc. is evaluating two possible investments in depreciable plant assets. The company uses the straight-line method of depreciation. The following information is available: Investment A Investment B $101,000 Initial capital investment Estimated useful life $151,000 10 years 10 years Estimated residual value $20.000 $47.000 12% Estimated annual net cash inflow for 10 years $28.000 Required rate of return 12% Calculate the payback period for Investment A. (Round your answer to two decimal places.) O A. 1.00 year О В. 3.61 years O C. 2.22 years O D. 2.89 years
Angels Inc. purchases a piece of equipment for $65,000. The equipment has an expected useful life of five years. Its residual value is estimated to be $5,000. Assuming the firm uses the straight-line depreciation method, what is the depreciation expense on the equipment in the fifth full year? Select one: a. $10,000 b. $12,000 c. $11,000 d. $13,000
Suncoast Food Centers has provided the following information with regard to the purchase of equipment. Acquisition cost of equipment Useful life Salvage value at end of useful life Annual straight-line depreciation Annual income generated by asset (before deducting depreciation) Year 1 2 3 4 5 Use a 10 percent rate to compute the imputed interest charge. Required: Complete the following table. Income Before Depreciation $900,000 Annual Depreciation 5 years 0 $180,000 $270,000 Income Net of Depreciation Based on Net Book Value Average Net Book Imputed Interest Value Charge Residual Income Based on Gross Book Value Imputed Interest Charge Average Gross Book Value Residual Income
The first of certain equipment is P3,000,000.00 with a freight cost of P200,000.00 and taxes and legal fee of P360,000.00. if the salvage value of the machine is P300,0000 with an expected life of 8 years. Find the total depreciation at the end of 5th year. Using a) a) straight line method b) declining balanced method c) sinking fund method d) sum-of-year-digit method. Use r = 5%
Given a cost of a depreciable fixed asset of $24,000 with a salvage value of $2,000 and a life of 5 years, what is the annual depreciation of the fixed asset using the straight-line method? What would be the depreciation in the second year if it used the declining balance method at double the straight-line rate? In regards to question #1, if the company used the straight-line method and sold the asset after 4 years for $7,000, what would be the journal entry needed to record the transaction? What if they sold it for $5,000?
The Andrews Company has just purchased $46,710,000 of plant and equipment that has an estimated useful life of 15 years. The expected salvage value at the end of 15 years is $4,671,000. What will the depreciation expense for this purchase (exclude all other plant and equipment) be for the second year of use? (Use FASB GAAP)
The cost of an asset is $1,090,000, and its residual value is $240,000. Estimated useful life of the asset is eighteight years. Calculate depreciation for the first year using the doubleminus−decliningminus−balance method of depreciation. (Do not round any intermediate calculations, and round your final answer to the nearest dollar.) A. $106,250 B. $272,500 C. $136,250 D. $ 212,500