(Round to the nearest dollar.)Compute depreciation underdifferent methods.(LO 3, 9), AP*P9-8B Miriam Corporation purchased machinery on January 1, 2014, at a cost of$380,000. The estimated useful life of the machinery is 5 years, with an estimated salvagevalue at the end of that period of $20,000. The company is considering different deprecia-tion methods that could be used for financial reporting purposes.Instructions(a) Double-declining-balance(a) Prepare separate depreciation schedules for the machinery using the straight-linemethod, and the declining-balance method using double the straight-line rate.(b) Which method would result in the higher reported 2014 income? In the higher totalreported income over the 5-year period?(c) Which method would result in the lower reported 2014 income? In the lower totalreported income over the 5-year period?exp. 2015$91,200

Name: (Round to the nearest dollar.)Compute depreciation underdifferent met
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: (Round to the nearest dollar.)Compute depreciation underdifferent methods.(LO 3, 9), AP*P9-8B Miriam Corporation purchased machinery on January 1, 2014, at a cost of$380,000. The estimated useful life of the machinery is 5 years, with an estimated s

Depreciation methods include different types of methods which the company can apply to depreciate…

Business

Accounting

*P9-8B Miriam Corporation purchased machinery on January 1, 2014, at a cost of $380,000. The estimated useful life of the machinery is 5 years, with an estimated salvage value at the end of that period of $20,000. The company is considering different deprecia- tion methods that could be used for financial reporting purposes. Instructions (a) Prepare separate depreciation schedules for the machinery using the straight-line method, and the declining-balance method using double the straight-line rate. (b) Which method would result in the higher reported 2014 income? In the higher total reported income over the 5-year period? (c) Which method would result in the lower reported 2014 income? In the lower total reported income over the 5-year period?

*P9-8B Miriam Corporation purchased machinery on January 1, 2014, at a cost of $380,000. The estimated useful life of the machinery is 5 years, with an estimated salvage value at the end of that period of $20,000. The company is considering different deprecia- tion methods that could be used for financial reporting purposes. Instructions (a) Prepare separate depreciation schedules for the machinery using the straight-line method, and the declining-balance method using double the straight-line rate. (b) Which method would result in the higher reported 2014 income? In the higher total reported income over the 5-year period? (c) Which method would result in the lower reported 2014 income? In the lower total reported income over the 5-year period?

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: Regal Company acquired a delivery truck on 2009 January 2, for $107,200. The truck had an estimated…

A: Certainly, straight-line depreciation allocates the cost of an asset minus its salvage value evenly…

Q: On January 2, 2018, the Jackson Company purchased equipment to be used in its manufacturing process.…

A: Straight line method: Under the straight line method of depreciation, the same amount of…

Q: afe Shipment Company purchased a delivery truck on January 1, 2015, at a cost of $ 150,000. The…

A: As per IFRS a change in total estimated useful life and salvage value is change in accounting…

Q: On April 17, 2018, the Loadstone Mining Company purchased the rights to a coal mine. The purchase…

A: 1) Compute depletion expense for the year 2018:

Q: Hhi. What is the answr/solution to this problem? Depreciation by Two Methods; Sale of Fixed Asset…

A: Straight line depreciation is a method of charging same or constant depreciation over the life of…

Q: SE9-3 Depreciation expense Using the Double-Declining Balance method The Pack Company purchased an…

A: Double-declining balance method: The double-declining balance method of depreciation, also known as…

Q: Lindy Weink, the new controller of Oriole Company, has reviewed the expected useful lives and…

A: Depreciation is the anticipated decrease in value of fixed assets well over course of a fiscal year.…

Q: On January 1, 2025, Sunland Corp, acquired a machine at a cost of $960000. It is to be depreciated…

A: Step 1:Computation of the annual depreciation expense on the machine using the straight-line…

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

A: Depreciation represents the fall in the historical value of the fixed asset due to normal damage…

Q: 1. Complete a separate depreciation schedule for each of the alternative methods. a. Straight-line.…

A: Depreciation refers to a decrease in the book value of fixed assets over its useful life. It is a…

Q: a. Using the original values, how much annual depreciation expense did Carla Vista recognize for the…

A: Category of Asset Date Acquired Historical Cost Accumulated Dep Use Full Life Original Use…

Q: Record the general journal entry required for the disposal of the equipment on 1 July 2024 if…

A: Straight line method of depreciation is one of the popular method of charging depreciation under…

Q: 1. Journal Entry on June 02, 2017. 2 A

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

Q: Corzi Corporation purchased a Machine on January 1, 2017 for $80,000. The machinery is estimated to…

A: Under sum of the year digits method, the depreciation is calculated on the basis of depreciation…

Q: M8-12 Computing Depreciation Under Straight-Line and Double-Declining-Balance A delivery van costing…

Q: Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of…

A: a) Straight line method: Depreciation = =843,750-72,6005=$154,230 Year DepreciationExpense…

Q: Oregon Company is in the process of preparing its financial statements for 2024 Assume that no…

A: Lets understand the basics. Depreciation is a reduction in value of asset due to wear and tear,…

Q: Pharoah Company changed depreciation methods in 2025 from double-declining-balance to straight-line.…

A: The Depreciation is a non-cash expense that allows companies to make provisions for the replacement…

Q: On Jan 1, 2021, ABC Company acquired a machinery at a cost of P250,000. It was estimated to have a…

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

Q: Situation 1: Ducharme Corporation purchased electrical equipment at a cost of $62,000 on June 2,…

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

Q: Depreciation Method

A: In this question, we have to calculate depreciation by three method straight-line, production method…

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

(Round to the nearest dollar.)
Compute depreciation under
different methods.
(LO 3, 9), AP
*P9-8B Miriam Corporation purchased machinery on January 1, 2014, at a cost of
$380,000. The estimated useful life of the machinery is 5 years, with an estimated salvage
value at the end of that period of $20,000. The company is considering different deprecia-
tion methods that could be used for financial reporting purposes.
Instructions
(a) Double-declining-balance
(a) Prepare separate depreciation schedules for the machinery using the straight-line
method, and the declining-balance method using double the straight-line rate.
(b) Which method would result in the higher reported 2014 income? In the higher total
reported income over the 5-year period?
(c) Which method would result in the lower reported 2014 income? In the lower total
reported income over the 5-year period?
exp. 2015
$91,200

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction:

VIEW

Step 2 Calculation:

VIEW

Step 3 Explanation:

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

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

sa
Calculate the depreciation expense in the year of 2014 by using Straight line method Asif Company acquired machinery on January 1, 2014 with an amount AED84,000. The useful life of the machinery is expected to be 4 years. The salvage value at the end of the life of the machinery is expected to be AED4,000. The machinery can produce maximum 80,000 units during its useful life.
Do not give image format
Linton Company purchased a delivery truck for $S34,000 on January 1, 2014. The truck has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of 10 years. Actual miles driven were 19,000 in 2014 and 16,000 in 2015. Instructions a) Compute depreciation expense for 2014 and 2015 using (1) the straight-line method and (2) the units-of-activity method (b) Assume that Linton uses the straight-line method, Prepare the journal entry to record 2014 depreciation.
Asset ImpairmentGreen Light Ltd (GLL) tested a machine for impairment on 31 December 2018. The machine was carried at depreciated historical cost, and its carrying amount was $150,000. It had an estimated remaining useful life of 10 years. GLL's accounting policy required all property, plant and equipment's recoverable amount was determined on the basis of value-in-use calculation, using a discount rate of 15%. The management of GLL estimated the future net cash flows of the machine using reasonable assumptions. The following information related to future net cash flows of the machine was available at the end of 2018. Year Future net cash flow ('000)2019 22,1652020 21,4502021 20,5502022 24,7252023 25,3252024 24,8252025 24,1232026 25,5332027 24,2342028 22,850 Suppose in the years 2019-2021, no event occurred that required the machine's recoverable amount to be re-estimated. On 31 December 2022, costs of $25,000 were incurred to enhance the machine's performance. Revised estimated…
Urmilaben
ABC Company acquired a machine on January 1, year 2016 for $100,000. The machine is depreciated using the double-declining- balance method, and was estimated to have a 10 year useful life and a salvage value of $10,000. On January 1, year 2018, the company revised its estimations as: a useful life of 5 years beginning from that date, and with a salvage value of $15,000 at the end of 5 years. How much depreciation expense should ABC Company recognize in year 2018? Multiple Choice 13,400 O 21,040 25,600 16,000
On January 2, 2015, Wang Company acquired equipment to be used in its manufacturing operations. The equipment has an estimated useful life of 10 years and an estimated salvage value of $45,000. The depreciation applicable to this equipment was $210,000 for 2018, computed under the sum-of-the-years'-digits method. What was the acquisition cost of the equipment? A. $1,605,000 B. $1,695,000 C. $1,650,000 D. $1,625,000
E8-28 Computing Depreciation and Accounting for a Change of Estimate In January 2016, Rankine Company paid $8,500,000 for land and a building. An appraisal estimated that the land had a fair value of $2,500,000 and the building was worth $6,000,000. Rankine estimated that the useful life of the building was 30 years, with no residual value. a. Calculate annual depreciation expense using the straight-line method. b. Calculate depreciation for 2016 and 2017 using the double-declining-balance method. c. Assume that in 2018, Rankine changed its estimate of the useful life of the building to 25 years. If the company is using the double-declining-balance method of depreciation, what amount of depreciation expense would Rankine record in 2018?