Oriole Snowboarding Company, a public company, purchased equipment on January 10, 2020, for $750,000. At that time. management estimated that the equipment would have a useful life of 10 years and a residual value of $50,000. Oriole uses the straight-line method of depreciation and has a December 31 year end. Oriole tested the equipment for impairment on December 31, 2024, after recording the annual depreciation expense. It was determined that the equipment's recderable amount was $325,000, and that the total estimated useful life would be eight years instead of 10, with a residual value of $10,000 instead of $50,000.

Oriole Snowboarding Company, a public company, purchased equipment on January 10, 2020, for $750,000. At that time. management estimated that the equipment would have a useful life of 10 years and a residual value of $50,000. Oriole uses the straight-line method of depreciation and has a December 31 year end. Oriole tested the equipment for impairment on December 31, 2024, after recording the annual depreciation expense. It was determined that the equipment's recderable amount was $325,000, and that the total estimated useful life would be eight years instead of 10, with a residual value of $10,000 instead of $50,000.

Name: Current Attempt in ProgressOriole Snowboarding Company, a public comp
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Description: Current Attempt in ProgressOriole Snowboarding Company, a public company, purchased equipment on January 10, 2020, for $750,000. At that time.management estimated that the equipment would have a useful life of 10 years and a residual value of $50,00

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

Current Attempt in Progress
Oriole Snowboarding Company, a public company, purchased equipment on January 10, 2020, for $750,000. At that time.
management estimated that the equipment would have a useful life of 10 years and a residual value of $50,000. Oriole uses the
straight-line method of depreciation and has a December 31 year end.
Oriole tested the equipment for impairment on December 31, 2024, after recording the annual depreciation expense. It was
determined that the equipment's recderable amount was $325,000, and that the total estimated useful life would be eight years
instead of 10, with a residual value of $10,000 instead of $50,000.
(a)
What will appear on Oriole's 2024 balance sheet with regard to this equipment?
Property, Plant, and Equipment
Equipment
Oriole Snowboarding Company
Balance Sheet (Partial)
For the Quarter Ended December 31, 2024
eTextbook and Media
4
Assets
Less : Accumulated Depreciation Equipment

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