Answered: On January 1, Year 1, Marino Moving…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter18: Accounting For Long-term Assets

Section: Chapter Questions

Problem 3CE: A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years....

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Question

On January 1, Year 1, Marino Moving Company paid $50,500 cash to purchase a truck. The truck was expected to have a four-year useful life and an $9,000 salvage value. Marino uses the straight-line method. On January 1, Year 3, Marino’s accounting records contained the following balances:

Truck $50,500

Accumulated Depreciation $20,750

Also, on January 1, Year 3 the company paid $12,500 to replace the engine to make the truck better by enabling it to operate using less expensive natural gas. Based on this information, the balance in the accumulated depreciation shown on the Year 3 balance sheet is:

Multiple Choice

$29,750.
$16,625.
$37,375.
$20,750.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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