On January 1, 2016, Nicholas Company purchased Office Equipment for $112,000 with an estimated useful life of 5 years, or 250,000 hours and a residual value of $12,000. Compute the annual depreciation at the end of 2018, the 3rd year, under each of the following depreciation method for Nicholas Company: 1) 2) 3) Straight-Line Method Units of Production Method, assume that a total of 70,000 hours were used in 2018. Double-Declining Balance Method

On January 1, 2016, Nicholas Company purchased Office Equipment for $112,000 with an estimated useful life of 5 years, or 250,000 hours and a residual value of $12,000. Compute the annual depreciation at the end of 2018, the 3rd year, under each of the following depreciation method for Nicholas Company: 1) 2) 3) Straight-Line Method Units of Production Method, assume that a total of 70,000 hours were used in 2018. Double-Declining Balance Method

Name: On January 1, 2016, Nicholas Company purchased Office Equipment for $
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: On January 1, 2016, Nicholas Company purchased Office Equipment for $112,000 with an estimated useful life of 5 years, or 250,000hours and a residual value of $12,000.Compute the annual depreciation at the end of 2018, the 3rd year, under each of th

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Birkey Company purchased equipment on January 1, 2020, at a total cost of $99,000. The machinery’s…

A: Depreciation: It is a non-cash expense. This is the decrease in the value of a fixed asset because…

Q: A truck acquired at a cost of $465,000 has an estimated residual value of $27,900, has an estimated…

A: The depreciation is a decline in the value of tangible assets over their useful life. it is a…

Q: Asif Company acquired machinery on January 1, 2014 with an amount AED84,000. The useful life of the…

A: Part (d) (i) Straight Line Method Cost of Machinery = AED 84,000 Salvage Value = AED 4,000 Useful…

Q: 1. On January 1, 20X1, WebHelper Inc. purchased equipment for $150,000. The estimated service life…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: The Jefferson Co. purchased a machine on January 1, 2016. The machine cost $595,000. It had an…

A: Solution: Introduction: The Jefferson Co. purchased a machine on January 1, 2016. The machine cost…

Q: WebHelper Inc. acquired 100% of the outstanding stock of Silicon Chips Corporation (SCC) for $47.0…

A: The impairment loss is recorded when the fair value of the asset is less than the carrying value.…

Q: On August 3, Cinco Construction purchased special-purpose equipment at a cost of $9,300,000. The…

A: Depreciation refers to the expense which is incurred for reducing the value of assets due to…

Q: purchased factory equipment on January 1, 2017, for $65,000.

Q: On April 1, 2013, Parks Co. purchased machinery at a cost of $42,000. The machinery is expected to…

A: Depreciation is a reduction in the value of assets due to the usage of that asset. We can evaluate…

Q: Dexter Industries purchased packaging equipment on January 8 for $353,200. The equipment was…

A: solution given Purchase cost 353200 Useful life in years 3 years Useful life in…

Q: The Lewis Company acquired a large, highly-automated machine for $3,000,000 on February 28, 2016. It…

A: The calculation of depreciation expenses using Straight-line method: Depreciation expenses = (Cost…

Q: Straight-Line and Units-of-Production Methods Assume that Sample Company purchased factory equipment…

A: The question is related to Depreciation Accounting. Required 1. a. Depreciation on SLM b.…

Q: Calculate the depreciation for each year of the truck's life. (Roune

A: The double declining balance (DDB) method is an accelerated depreciation calculation used in…

Q: Equipment purchased at the beginning of the fiscal year for $150,000 is expected to have a useful…

A: A decrease in the value of assets due to usage, obsolescence, or passage of time is known as…

Q: On January 2, 2017, Wavepoint Systems, a cell phone manufacturer, installed a computerized machine…

A: Depreciation is the non-cash expense charged on the non-current assets of the entity. It is reported…

Q: Wynn Furnance Corp. purchased machinery for $345,000 on May 1, 2014. It is estimated that it will…

A: Depreciation is the loss in the value of the asset caused due to its usage, wear and tear.There are…

Q: Equipment acquired on January 2, 2013 at a cost of $305,500 has an estimated useful life of eight…

A: Depreciation is the reduction in the value of asset due to normal wear and tear.

Q: Perdue Company purchased equipment on April 1 for $86,670. The equipment was expected to have a…

A: Given that, cost of the asset = $86670 The useful life of asset = 3 Years total operating hours =…

Q: If 40,000 units were produced in 20X1 and 60,000 were produced in 20X2, what amount of accumulated…

A: The correct option is C. $150,000

Q: 22 Tolbert Company purchased equipment on January 1, 2011 for $60,000. It is estimated that the…

A: Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: Kap Company switched from the sum-of-the-years-digits depreciation method to straight-line…

A: Sum of years depreciation:It is one of the depreciation methods which is based on the assumption…

Q: At the beginning of last year, Barrington Corporation purchased a piece of heavy equipment for…

A: DEPRECIATION EXPENSEDepreciation means gradual decrease in value of assets due to normal wear and…

Q: On June 15, 2015, Jupiter Corporation purchased a machine for $50,000 with an estimated useful life…

A: Lets understand the basics. In units of production basis, depreciation is calculated based on the…

Q: On January 1, 2010, Woodstock, Inc. purchased a machine costing $41,000. The expected useful life of…

A: This is incorrect because the net property, plant, and equipment (PPE) balance at December 31,…

Q: Wildhorse Company uses the straight-line method of depreciation. The company's fiscal year end is…

A: Journal Entries - Journal Entries are the recording of transactions of the organization. It is…

Q: Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8…

A: Depreciation can be computed in the following few methods which are enumerated as below: 1.…

Q: The company acquired a machine on January 1 at an orgional cost of $70,000. The machine's estimated…

A: Solution 1) Depreciation according straight line method is as follows: Therefore the amount of…

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.

Topic Video

Question

On January 1, 2016, Nicholas Company purchased Office Equipment for $112,000 with an estimated useful life of 5 years, or 250,000
hours and a residual value of $12,000.
Compute the annual depreciation at the end of 2018, the 3rd year, under each of the following depreciation method for Nicholas
Company:
1)
2)
3)
Straight-Line Method
Units of Production Method, assume that a total of 70,000 hours were used in 2018.
Double-Declining Balance Method

Years
2016
2017
2018
tA
$
tA
$
$
LA
Annual Depreciation
Depreciation for 2018
$
Accumulated Depreciation
$
$
$
$
$
$
Book Value

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Define Depreciation

VIEW

Step 2: 1) Compute the depreciation using single-line method

VIEW

Step 3: 2) Compute the depreciation using unit of production method

VIEW

Step 4: 3) Compute the depreciation using sdouble declining balance method

VIEW

Solution

VIEW

Step by step

Solved in 5 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Dexter Industries purchased packaging equipment on January 8 for $676, 800. The equipment was expected to have a useful life of three years, or 6,900 operating hours, and a residual value of $55, 800. The equipment was used for 2,760 hours during Year 1, 2, 139 hours in Year 2, and 2,001 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ending December 31, Year 1, Year 2, Year 3, by (a) the straight-line method, (b) the units - of- activity method, and (c) the double- declining - balance method. Also determine the total depreciation expense for the three years by each method. Note: For all methods, round the answer for each year to the nearest whole dollar.
Cheadle Company purchased a fleet of 20 delivery trucks for $8,000 each on January 2, 2019. It decided to use composite depreciation on a straight-line basis and calculated the depreciation from the following schedule: 1. Prepare the journal entries necessary to record the preceding events. 2. Assume that the company expected all the trucks to last 4 years and be retired for $1,600 each. Using group depreciation, prepare journal entries for all 6 years, assuming the company retired the trucks as shown by the latter schedule.
Birkey Company purchased equipment on January 1, 2020, at a total cost of $99,000. The machinery’s estimated useful life is 8 years or 60,000 hours, and its residual value is $9,000. During 2020 and 2021, the machinery was used 7,000 and 8,00 hours, respectively. Calculate the depreciation expense for 2020 using the units-of-production method. Show your calculations Blank 1. Fill in the blank, read surrounding text. 2020 Depreciation Expense Units-of-Production Method Blank 2. Fill in the blank, read surrounding text.
Dexter Industries purchased packaging equipment on January 8 for $215,400. The equipment was expected to have a useful life of three years, or 7,600 operating hours, and a residual value of $17,800. The equipment was used for 2,900 hours during Year 1, 2,400 hours in Year 2, and 1,400 hours in Year 3. 1. Determine the amount of depreciation expense for the three years ending December 31, Year 1, Year 2, Year 3, by (a) the straight-line method,
A truck acquired at a cost of $202,800 has an estimated residual value of $18,000, has an estimated useful life of 440,000 miles, and was driven 113,000 miles during the year. Determine the following. If required, round your answer for the depreciation rate to 2 decimal places. a. The depreciable cost $ b. The depreciation rate $ per mile c. The units-of-activity depreciation for the year $
Mountain View Resorts purchased equipment at the beginning of 2021 for $41,000. Residual value at the end of an estimated four-year service life is expected to be $6,600. The machine operated for 1,600 hours in the first year and the company expects the machine to operate for a total of 11,000 hours over its four-year life. Calculate depreciation expense for 2021, using each of the following depreciation methods: (1) straight-line, (2) double-declining-balance, and (3) activity-based. (Round your intermediate calculations to 2 decimal places.)
On April 17, 2016, the Loadstone Mining Company purchased the rights to a coal mine. The purchase price plus additional costs necessary to prepare the mine for extraction of the coal totaled $4,500,000. The company expects to extract 900,000 tons of coal during a four-year period. During 2016, 240,000 tons were extracted and sold immediately. Required: 1. Calculate depletion for 2016. 2. Discuss the accounting treatment of the depletion calculated in requirement 1.
Honesty Manufacturing purchased a machine on 1 July, 2017. The following financial information has been collected to calculate the depreciation at 30 June 2019: Cost $58,500 Expected salvage value $1,000 Estimated useful life in years 5 Estimated useful life in hours 200,000 Hours used in 2020 is: 48,000 Required: Calculate the depreciation expense of the machine for the year ended 30 June 2019 using: a) Straight-line method b) Unit of activity method c) Declining balance method using double straight-line rate
Dexter Industries purchased packaging equipment on January 8 for $392,400. The equipment was expected to have a useful life of four years, or 6,000 operating hours, and a residual value of $32,400. The equipment was used for 2,100 hours during Year 1, 1,260 hours in Year 2, 1,680 hours in Year 3, and 960 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the four years ending December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the four years by each method. Round the answer for each year to the nearest whole dollar.
Equipment acquired on October 1, 2014, at a cost of $540,000 has an estimated useful life of 10 years. The residual value is estimated to be $55,000 at the end of the equipment's useful life. The company has a December 31 year end. Instructions Calculate the depreciation expense for December 31, 2014 and 2015 using: the straight-line method. b. the double diminishing-balance method.
On August 1, 2015, Toy inc. purchosed a new piece of equipment that cost$25000. The estimoted useful ife is five years and the estimated residual value is 52,500 . During the five years of useful life the equpment is expected to produce 10.000 units. If the company uses the double declining bolance method of depreciation, what is the depreciation expense for the yeat ended December 31 , 2016 ? Mutiple Croice $15,000 $5,400 $8,333 $6,000 None of the other atfenatives aro correct
Oliver Company purchased tool sharpening equipment on October 1 for $138,000. The equipment was expected to have a useful life of three years or 13,000 operating hours, and a residual value of $7,700. The equipment was used for 1,650 hours during Year 1, 4,700 hours in Year 2, 3,850 hours in Year 3, and 2,800 hours in Year 4. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by the straight-line method the units-of-activity method the double-declining-balance method.