On September 1st, 2021 a company purchased a piece of plant equipment for $53,000. In addition to the purchase price they paid $2,500 in transportation costs to have it shipped to their factory and $3,500 in installation costs. The equipment estimated to have a twelve year life with a residual (salvage) value of $5,000. Using the straight-line method of depreciation how much depreciation expense will the company record for 2021?

On September 1st, 2021 a company purchased a piece of plant equipment for $53,000. In addition to the purchase price they paid $2,500 in transportation costs to have it shipped to their factory and $3,500 in installation costs. The equipment estimated to have a twelve year life with a residual (salvage) value of $5,000. Using the straight-line method of depreciation how much depreciation expense will the company record for 2021?

Name: On September 1st, 2021 a company purchased a piece of plant equipment
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Description: On September 1st, 2021 a company purchased a piece of plant equipment for $53,000. In addition to the purchase price they paid $2,500 in transportation costs to have it shipped to their factory and$3,500 in installation costs. The equipment is estim

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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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Question

On September 1st, 2021 a company purchased a piece of plant equipment for $53,000. In addition to the purchase price they paid $2,500 in transportation costs to have it shipped to their factory and
$3,500 in installation costs. The equipment is estimated to have
twelve year life with a residual (salvage) value of $5,000. Using the straight-line method of depreciation how much depreciation expense
will the company record for 2021?
Numeric Response

On January 1st, 2020 a company purchased a vehicle for $36,000. The company estimated the vehicle useful life of 120,000 miles. with a residual (salvage) value of $3,000. The company determined they
no long needed the vehicle and sold it for $21,000 after being driven 60,000 miles. As a result of the sale the company would record a gain or (Loss) of:
Numeric Response

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