On January 1, 2022, Myron made $100,000 worth of extraordinary repairs on this equipment. It financed these repairs by taking out a two-year, 12% note. These repairs are expected to extend the useful life of the equipment by an additional three (3) years past its original five (5) year life (to a new total life of 8 years). There is no change expected to the asset’s residual value. Myron uses the straight-line depreciation method for all its depreciable assets. Description Information Purchase Date January 1, 2020 Original capitalized cost $800,000 Original useful life 5 years Original residual value $40,000 How much depreciation expense should be recorded on the equipment for the year ending 12/31/22? Round to the nearest whole dollar.
On January 1, 2022, Myron made $100,000 worth of extraordinary repairs on this equipment. It financed these repairs by taking out a two-year, 12% note. These repairs are expected to extend the useful life of the equipment by an additional three (3) years past its original five (5) year life (to a new total life of 8 years). There is no change expected to the asset’s residual value. Myron uses the straight-line depreciation method for all its depreciable assets. Description Information Purchase Date January 1, 2020 Original capitalized cost $800,000 Original useful life 5 years Original residual value $40,000 How much depreciation expense should be recorded on the equipment for the year ending 12/31/22? Round to the nearest whole dollar.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2022, Myron made $100,000 worth of extraordinary repairs on this equipment. It financed these repairs by taking out a two-year, 12% note.
These repairs are expected to extend the useful life of the equipment by an additional three (3) years past its original five (5) year life (to a new total life of 8 years). There is no change expected to the asset’s residual value. Myron uses the
| Description | Information |
| Purchase Date | January 1, 2020 |
| Original capitalized cost | $800,000 |
| Original useful life | 5 years |
| Original residual value | $40,000 |
How much depreciation expense should be recorded on the equipment for the year ending 12/31/22? Round to the nearest whole dollar.
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