On January 1, 1978, the purchasing engineer of Itadori Co. purchased a new hydraulic machine at a cost of 140,000. Depreciation has been computed by the straight-line method based on an estimated useful life of five years and a residual scrap value of 12,800. On January 2, 1981, extraordinary repairs (which were almost equivalent to a rebuilding of machinery) were performed at a cost of 30,400. Because of the thoroughgoing nature of these repairs, the normal life of the machinery was extended materially. The revised estimate of useful life was four years from January 1, 1981. Determine the annual provision for depreciation for the years 1978 to 1980.

On January 1, 1978, the purchasing engineer of Itadori Co. purchased a new hydraulic machine at a cost of 140,000. Depreciation has been computed by the straight-line method based on an estimated useful life of five years and a residual scrap value of 12,800. On January 2, 1981, extraordinary repairs (which were almost equivalent to a rebuilding of machinery) were performed at a cost of 30,400. Because of the thoroughgoing nature of these repairs, the normal life of the machinery was extended materially. The revised estimate of useful life was four years from January 1, 1981. Determine the annual provision for depreciation for the years 1978 to 1980.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Copy equipment was acquired at the beginning of the year at a cost of $41,560 that has an estimated residual value of $3,800 and an estimated useful life of 5 years. It is estimated that the machine will output an estimated 944,000 copies. This year, 271,000 copies were made. Determine the (a) depreciable cost, (b) depreciation rate, and (c) units-of-activity depreciation for the year. Round "depreciation rate" to two decimal places. a. Depreciable cost $fill in the blank 1 b. Depreciation rate fill in the blank 2 per copy c. The units-of-output depreciation for the year $fill in the blank 3
[The following information applies to the questions displayed below.] Ramirez Company installs a computerized manufacturing machine In its factory at the beginning of the year at a cost of $85,400. The machine's useful life is estimated at 20 years, or 402,000 units of product, with a $5,000 salvage value. During its second year, the machine produces 34,200 units of product. Determine the machine's second-year depreciation using the units-of-production method.
On July 1, 2023 Jackson Company purchased factory equipment for $880,000 with an estimated $40,000 salvage value. The estimated useful life for the equipment is 12 years. During 2023, 2024, and 2025 the equipment is depreciated using the straight-line method. During 2026, $36,000 in maintenance is required on the machine to keep it running up to its standard operating specifications. Also, in 2026, $115,000 is spent to improve the equipment's efficiency and prolong its useful life. The new useful life is expected to be an additional 12 years beginning in 2026 and the revised salvage value is $25,000. Instructions . 4. Explain the accounting treatment of the $115,000 in equipment improvement that occurred in 2026. 5. What journal entry is required to record annual depreciation for 2026? hevni pris
In 1990, Sunland Company completed the construction of a building at a cost of $880,000 and first occupied it in January 1991. It was estimated that the building would have a useful life of 40 years and a salvage value of $26,000 at the end of that time. Early in 2001, an addition to the building was constructed at a cost of $220,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $9,000. In 2019, it is determined that the probable life of the building and addition will extend to the end of 2050, or 20 years beyond the original estimate. Using the straight-line method, compute the annual depreciation that would have been charged each year from 1991 through 2000. Annual depreciation from 1991 through 2000 Compute the annual depreciation that would have been charged from 2001 through 2018. Annual depreciation from…
Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $81,400. The machine's useful life is estimated at 20 years, or 387,000 units of product, with a $4,000 salvage value. During its second year, the machine produces 32,700 units of product. Determine the machine’s second-year depreciation using the double-declining-balance method.
At the beginning of the current year, a company purchased and placed in service a machine with a cost of $240,000. The company estimated the machine’s useful life to be five years or 60,000 units of output with an estimated salvage value of $60,000. During the current year, 15,000 units were produced. Show your work below and then record the entries in the journal Calculate the depreciation using the: Straight-line method of depreciation Units-of-production method of depreciation Prepare the necessary December 31 adjusting entry to record depletion for the current year using the general journal.
Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $22,000. The estimated useful life was five years and the residual value was $2,000. Required: Complete a depreciation schedule for the straight-line method. Prepare the journal entry to record Year 2 depreciation.
In 1993, Windsor Company completed the construction of a building at a cost of $2,160,000 and first occupied it in January 1994. It was estimated that the building will have a useful life of 40 years and a salvage value of $65,600 at the end of that time. Early in 2004, an addition to the building was constructed at a cost of $540,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $21,600. In 2022, it is determined that the probable life of the building and addition will extend to the end of 2053, or 20 years beyond the original estimate. (a) Your answer is correct. Using the straight-line method, compute the annual depreciation that would have been charged from 1994 through 2003. Annual depreciation from 1994 through 2003 %$4 52360 /yr. eTextbook and Media
ramirez company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $49,100. The machine's useful life is estimated at 10 years, or 401,000 units of product, with a $9,000 salvage value. During its second year, the machine produces 34,100 units of product. Determine the machine's second-year depreciation using the units-of-production method
The Black Limo Company (BLC) purchased a limo on January 1 of Year 1. The limo cost $48,000. It had an expected useful life of 4 years and an $8,000 salvage value. Assume BLC uses straight-line depreciation. At the beginning of Year 3, the limo is sold for $30,000 cash. As a result of the asset disposal BLC will recognize a ______ activities.