Meher & Company purchased, on 1st January 2019, a machine for producing cranes. The machine costOMR 108,000 and was estimated to have a ten-year life with a residual value of OMR 8,000. Thecompany plans on using one out of the two most important methods of deprecation which are straightline & written down value methods. The CEO wants to decide on which method based on a fewcalculations that he asks you to perform which are given below. Prepare the required calculations to helpthe CEO arrive at a final decision. Required (a) Prepare a table of depreciation and net book values overthe ten-years using straight-line depreciation. (b) Prepare a table of depreciation and net book valueover the ten years using reducing - balance depreciation. (c) Using the straight-line method ofdepreciation, show the effect of selling the asset at the end of Year 4 for a price of OMR 75,000. (d) Usingthe reducing balance method of depreciation, demonstrate the effect on disposing the asset at the endof Year 5 for OMR 44,000.

Machine Details:Cost: OMR 108,000Estimated Life: 10 yearsResidual Value: OMR 8,000(a) Straight-Line…

Answered: Meher & Company purchased, on 1st…

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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This one too for step by step 16. Assume that ABC Company purchased a new machine on January 1, 2018, for $96,000. The machine has an estimated useful life of nine years and a residual value of $6,000. Banker has chosen to use the straight-line method of depreciation. On January 1, 2020, ABC discovered that the machine would not be useful beyond December 31, 2023, and estimated its value at that time to be $4,000. Calculate the depreciation expense, accumulated depreciation, and book value of the asset for each year 2018 to 2023
Victor Mineli, the new controller of Crane Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2022. Here are his findings: Type ofAsset DateAcquired Cost AccumulatedDepreciation,Jan. 1, 2022 Useful Life (in years) Salvage Value Old Proposed Old Proposed Building Jan. 1, 2014 $737,000 $134,400 40 58 $65,000 $36,700 Warehouse Jan. 1, 2017 121,000 23,290 25 20 4,550 5,100 All assets are depreciated by the straight-line method. Crane Company uses a calendar year in preparing annual financial statements. After discussion, management has agreed to accept Victor’s proposed changes. (The “Proposed” useful life is total life, not remaining life.) 1. Compute the revised annual depreciation on each asset in 2022. 2. Prepare the entry to record depreciation on the building in 2022.
Company Omega bought new office furniture in the year 2010. The purchase cost was 64,086 dollars and in addition it had to spend 14,102 dollars for installation. The furniture has been in use since April 3rd, 2010. Omega forecasted that in 2025 the office furniture would have a net salvage value of $1000. Using the US Accelerated Depreciation Schedule, estimate the value of depreciation recorded in the accounting books in the year 2014 if the company decided to sell the furniture on June 24th (of 2014). (note: round your answer to the nearest cent and do not include spaces, currency signs, or commas)
Victor Mineli, the new controller of Blossom Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2025. Here are his findings: Accumulated Useful Life (in years) Salvage Value Type of Asset Date Acquired Depreciation, Cost Jan. 1, 2025 Old Proposed Old Proposed Building Jan. 1, 2017 $783,500 $144,200 40 58 $62,500 $36,600 Warehouse Jan. 1, 2020 118,000 22,520 25 20 20 5,400 3,980 All assets are depreciated by the straight-line method. Blossom Company uses a calendar year in preparing annual financial statements. After discussion, management has agreed to accept Victor's proposed changes. (The "Proposed" useful life is total life, no remaining life.) Compute the revised annual depreciation on each asset in 2025. (Round answers to O decimal places, e.g. 125.) Revised annual depreciation Building Warehouse
On January 1, 2017, Alissa Company purchased a truck for $450,000, and planned to use the truck for 150,000 miles and then sell the truck for $90,000. The company drove the truck for 30,000 miles in 2017 and 40,000 miles in 2018. On January 1, 2019, the company did a major overhaul of the truck for $75,000 and revised the total useful life of the truck to be 250,000 miles and the salvage value to be $60,000. Assuming the company uses the units of output method and that it used the truck for 35,000 miles in 2019, determine the depreciation expense for the truck for 2019. A. $43,167 B. $47,250 C. $57,750 D. $40,250
Please answer step by step with explanation don't skip any important concept.
SIMCO Company purchases a machine on 1/1/2020, at a cost of $24,000. The machine is depreciated using the straight-line method. The machine's useful life is estimated to be 5 years with a $4,000 salvage value. On 1/1/2022, management decides to change the useful life to 7 years, instead of 5 years, and keep salvage value the same.
You are an accountant for ABC Corp. Your purchasing department has procured products invoiced for $25,000 with 2/10 Net 30 terms. If you pay the invoice within 15 days, your payment would be: $25,500. $20,000. $24,500. $25,000. Accounting depreciation systematically allocates the cost of an asset in time over its useful life while economic depreciation deals with: The estimated loss of value of an asset minus the revenue it produces. The estimated salvage value of an asset at its end-of-life. The change of an asset’s value based on fair market price. The value of an asset matched to the revenue it creates indirectly.
Katie, your Accounting Manager, has asked you to calculate the depreciation for the new company car. The company purchased the new car on May 1, 2018. The purchase price was $22,600 and had a useful life of 3 years. The salvage or residual amount is 5% of the purchase price. Katie estimated that the car would be driven for 93,000 total miles. In year 1, the car was driven 48,900 miles. In year 2, the car was driven 35,180 miles, and in year 3, the car was driven 12,300 miles. Round the cost per mile to two decimal places. Calculate the total depreciation expense in Years 1 through 3 using the units of activity (production) method.
Victor Mineli, the new controller of Cullumber Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2022. Here are his findings: Type ofAsset DateAcquired Cost AccumulatedDepreciation,Jan. 1, 2022 Useful Life (in years) Salvage Value Old Proposed Old Proposed Building Jan. 1, 2014 $984,500 $182,900 40 58 $70,000 $36,600 Warehouse Jan. 1, 2017 168,500 32,490 25 20 6,050 4,400 All assets are depreciated by the straight-line method. Cullumber Company uses a calendar year in preparing annual financial statements. After discussion, management has agreed to accept Victor’s proposed changes. (The “Proposed” useful life is total life, not remaining life.) Compute the revised annual depreciation on each asset in 2022. (Round answers to 0 decimal places, e.g. 125.) Building Warehouse Revised annual depreciation $enter a…
I have the answer and question below but I just needf to know how to work it out Solve the problem. Round unit depreciation to nearest cent when making the schedule, and round final results to the nearest cent. A construction company purchased a piece of equipment for $1,710. The expected life is 7,000 hours, after which it will have a salvage value of $280. Find the amount of depreciation for the first year if the piece of equipment was used for 1,600 hours. Use the units-of-production method of depreciation. Answer: ($320)
At the beginning of 2018, Bridgeport Company acquired equipment costing $187,400. It was estimated that this equipment would have a useful life of 6 years and a salvage value of $18,740 at that time. The straight-line method of depreciation was considered the most appropriate to use with this type of equipment. Depreciation is to be recorded at the end of each year. During 2020 (the third year of the equipment's life), the company's engineers reconsidered their expectations, and estimated that the equipment's useful life would probably be 7 years (in total) instead of 6 years. The estimated salvage value was not changed at that time. However, during 2023 the estimated salvage value was reduced to $5,000. Indicate how much depreciation expense should be recorded each year for this equipment, by completing the following table. Depreciation Expense Accumulated Depreciation Year 2018 24 %24 2019 2020 2021 2022 2023 2024

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