• June Corporation purchased equipment on 1/1/20 for $650,000. In 2020 and 2021, June depreciated the asset on a straight-line basis with an estimated useful life of 8 years and a $10,000 residual value. In 2022, due to changes in technology, June revised the useful life to a total of six years with no residual value. What depreciation would June record for the year 2022 on this equipment? O $108,333. O $106,667. O $122,500. O None of the above is correct.
• June Corporation purchased equipment on 1/1/20 for $650,000. In 2020 and 2021, June depreciated the asset on a straight-line basis with an estimated useful life of 8 years and a $10,000 residual value. In 2022, due to changes in technology, June revised the useful life to a total of six years with no residual value. What depreciation would June record for the year 2022 on this equipment? O $108,333. O $106,667. O $122,500. O None of the above is correct.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 9MCQ: Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a...
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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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![• June Corporation purchased equipment on 1/1/20 for $650,000. In 2020 and 2021, June
depreciated the asset on a straight-line basis with an estimated useful life of 8 years and a
$10,000 residual value. In 2022, due to changes in technology, June revised the useful life to a
total of six years with no residual value. What depreciation would June record for the year 2022
on this equipment?
O $108,333.
O $106,667.
O $122,500.
O None of the above is correct.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4db7ccb8-0bc8-4eea-b7aa-79c15220745b%2F9670f95b-d502-49a6-ad36-657047e307e5%2Fqmo4gm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:• June Corporation purchased equipment on 1/1/20 for $650,000. In 2020 and 2021, June
depreciated the asset on a straight-line basis with an estimated useful life of 8 years and a
$10,000 residual value. In 2022, due to changes in technology, June revised the useful life to a
total of six years with no residual value. What depreciation would June record for the year 2022
on this equipment?
O $108,333.
O $106,667.
O $122,500.
O None of the above is correct.
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