On 01/4/2015, "ABC" Company purchased equipment for $120.000 On that date, the company estimated that the equipment salvage value and useful life will be equal to $5.000 and 10 years, respectively. Based on the above-given information answer the following questions, assuming the company is using the Double declining balance method for depreciation: 1. What is the depreciation expense for the year 2015 that will be presented on the income statement? 2. What is the equipment book value as on 31/12/2017? 3. if the company decided to exchange the equipment on 1/7/2018 with a new one. The current equipment (old one) has a fai market value of $55.000. and the fair market value of the new one is $90,000, based on that: o What is the amount of cash that "ABC" Company pay? • The exchange will result in "ABC" Company recording with an amount equal to

On 01/4/2015, "ABC" Company purchased equipment for $120.000 On that date, the company estimated that the equipment salvage value and useful life will be equal to $5.000 and 10 years, respectively. Based on the above-given information answer the following questions, assuming the company is using the Double declining balance method for depreciation: 1. What is the depreciation expense for the year 2015 that will be presented on the income statement? 2. What is the equipment book value as on 31/12/2017? 3. if the company decided to exchange the equipment on 1/7/2018 with a new one. The current equipment (old one) has a fai market value of $55.000. and the fair market value of the new one is $90,000, based on that: o What is the amount of cash that "ABC" Company pay? • The exchange will result in "ABC" Company recording with an amount equal to

Name: On 01/4/2015, "ABC" Company purchased equipment for $120,000 On that
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Description: On 01/4/2015, "ABC" Company purchased equipment for $120,000 On that date, the company estimated that the equipmentsalvage value and useful life will be equal to $5.000 and 10 years, respectively.Based on the above-given information answer the follo

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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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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On 01/4/2015, "ABC" Company purchased equipment for $120,000 On that date, the company estimated that the equipment
salvage value and useful life will be equal to $5.000 and 10 years, respectively.
Based on the above-given information answer the following questions, assuming the company is using the Double declining
balance method for depreciation:
1. What is the depreciation expense for the year 2015 that will be presented on the income statement?
2. What is the equipment book value as on 31/12/2017?
3. if the company decided to exchange the equipment on 1/7/2018 with a new one. The current equipment (old one) has a far
market value of $55.000, and the fair market value of the new one is $90,000, based on that:
o What is the amount of cash that "ABC" Company pay?
O The exchange will result in "ABC" Company recording
with an amount equal to

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