QUESTION 20 On, Jan. 1, 2020, ABC Corporation begins using a new welding machine. The capitalized acquisition cost of the machine is $40,000. ABC plans to use the machine for 12 years, at which point its salvage value is expected to be $4,600. What is the annual depreciation expense for this machine, using the straight-line method?

QUESTION 20 On, Jan. 1, 2020, ABC Corporation begins using a new welding machine. The capitalized acquisition cost of the machine is $40,000. ABC plans to use the machine for 12 years, at which point its salvage value is expected to be $4,600. What is the annual depreciation expense for this machine, using the straight-line method?

Name: QUESTION 20On, Jan. 1, 2020, ABC Corporation begins using a new weldi
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Description: QUESTION 20On, Jan. 1, 2020, ABC Corporation begins using a new welding machine. The capitalized acquisition cost of the machine is $40,000. ABC plans to use the machine for12 years, at which point its salvage value is expected to be $4,600. What is

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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Exercise One On July 1, 2022, Phillips Inc. Invested $480,000 in a mine estimated to have 800,000 tonnes of ore. At the end of production at the mine, the company estimates it will have to spend $150,000 to restore the site to an environmentally acceptable condition. The property will then be sold for $90,000. During the last six months of 2022, 100,000 tonnes of ore were mined and sold. Amortizable Cost per Unit: Amount of Amortization Allocated: Amount to be allocated to the restoration liability: a) Prepare the journal entry to record the depletion expense. Date Particulars Debit Credit
Depreciation and Rate of Return Burrell Company purchased a machine for $11, 000 on January 2, 2019. The machine has an estimated service life of 5 years and a zero estimated residual value. The asset earns income before depreciation and income taxes of $5,500 each year. The tax rate is 25%. Required: Compute the rate of return earned (on the average net asset value) by the company each year of the asset's life under the straight - line and the double declining - balance depreciation methods. Assume that the machine is the company's only asset. Straight - line method. If required, round to one decimal place. 2019 fill in the blank 1% 2020 fill in the blank 2% 2021 fill in the blank 3% 2022 fill in the blank 4% 2023 fill in the blank 5% Double - declining - balance depreciation method. Round to two decimal places. Round your intermediate dollar value calculations to the nearest whole number. 2019 fill in the blank 6% 2020 fill in the blank 7% 2021 fill in the blank 8% 2022 fill in the…
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An existing asset that cost $16,000 twoyears ago has a market value of $12,000 today, anexpected salvage value of $2,000 at the end of itsremaining useful life of six more years, and annualoperating costs of $4,000. A new asset under consideration as a replacement has an initial cost of$10,000, an expected salvage value of $4,000 at theend of its economic life of three years, and annualoperating costs of $2,000. It is assumed that thisnew asset could be replaced by another one identical in every respect after three years at a salvagevalue of $4,000, if desired. Use a MARR of 11%,a six-year study period, and PW calculations todecide whether the existing asset should be replacedby the new one
Depreciation and Rate of Return Burrell Company purchased a machine for $12,000 on January 2, 2019. The machine has an estimated service life of 5 years and a zero estimated residual value. The asset earns income before depreciation and income taxes of $6,000 each year. The tax rate is 30%. Required: Compute the rate of return earned (on the average net asset value) by the company each year of the asset's life under the straight-line and the double- declining-balance depreciation methods. Assume that the machine is the company's only asset. Straight-line method. If required, round to one decimal place. 2019 23.3 % 2020 30 % 2021 42 % < 2022 70 % 2023 210 % Double-declining-balance depreciation method. Round to two decimal places. Round your intermediate dollar value calculations to the nearest whole number. 2019 7.5 X % 2020 % 2021 % 2022 % 2023 % Feedback
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Sum-of-the-year's-digits. Jon Seceda Furnace Corp. purchased machinery for $315,000 on May 1, 2020. It is estimated that it will have a useful life of 10 years, salvage value of $15,000, production of 240,000 units, and working hours of 25,000. During 2021, Seceda Corp. uses the machinery for 2,650 hours, and the machinery produces 25,500 units My understanding of the equation is (Cost-Salvage Value) x Depreciation Fraction = Depreciation Charge. My calculation: ($315,000-$15,000) x 10/55 = 54,545.45 Bartely's answer (which is correct): ($315,000-$15,000) x 10/55 x 4/12 = 18,181.81 ($315,000-$15,000) x 9/55 x 8/12 = 32,727.27 Sum-of-the-Years'-digits = 50,909.08 (add 18,181.81 and 32,727.27) My question is where does the fractions (4/12 and 8/12) come from?