Question 40 of 50 View Policies < > -12 !!! Current Attempt in Progress Cullumber Co. uses straight-line depreciation. Cullumber Co. purchased machinery that cost $3050000 on January 4, 2019. The entire cost was recorded as an expense. The machinery has a 9-year life and a $205000 residual value. The error was discovered on December 20, 2021. Ignore income tax considerations. Before the correction was made, and before the books were closed on December 31, 2021, retained earnings was understated by

Question 40 of 50 View Policies < > -12 !!! Current Attempt in Progress Cullumber Co. uses straight-line depreciation. Cullumber Co. purchased machinery that cost $3050000 on January 4, 2019. The entire cost was recorded as an expense. The machinery has a 9-year life and a $205000 residual value. The error was discovered on December 20, 2021. Ignore income tax considerations. Before the correction was made, and before the books were closed on December 31, 2021, retained earnings was understated by

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 8PA: Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the...

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Effect of depreciation on net income Einstein Construction Co. specializes in building replicas of historic houses. Bree Andrus. president of Einstein Construction, is considering the purchase of various items of equipment on July 1. 20Y2. for $300,000. The equipment would have a useful life of five years and no residual value. In the past, all equipment has been leased. For tax purposes, Bee is considenng depreciating the equipment by the straight-line method. She discussed the matter with her CPA and learned that although the straight-line method could be elected, it was to her advantage to use the Modified Accelerated Cost Recovery System (MACRS) for tax purposes. She asked for your advice as to which method to use for tax purposes. What factors would you present for Bree’s consideration in the selection of a depreciation method?
Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.
Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000
Change in Estimate Assume that Bloomer Company purchased a new machine on January 1, 2016, for $80,000. The machine has an estimated useful life of nine years and a residual value of $8,000. Bloomer has chosen to use the straight-line method of depreciation. On January 1, 2018, Bloomer discovered that the machine would not be useful beyond December 31, 2021, and estimated its value at that time to be $2,000. Required Calculate the depreciation expense, accumulated depreciation, and book value of the asset for each year 2016 to 2021. Was the depreciation recorded wrong in 2016 and 2017? If so, why was it not corrected?
Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?
Compute straight-line depreciation. 4 BE9.4 (LO 2), AP Gordon Chemicals Company acquires a delivery truck at a cost of $31,000 on January 1, 2022. The truck is expected to have a salvage value of $4,000 at the end of its 4-year useful life. Compute annual depreciation for the first and second years using the straight-line method. Compute depreciation and evaluate treatment. REO FOTO) ANI C
On January 1, 2018, Wheeler, Inc. purchased some equipment for $3,900. The equipment had an estimated life of five years and an expected residual value of $200. On July, 1, 2020, the equipment was sold for $1,000. Wheeler uses straight-line depreciation. Refer to Exhibit 11-03, what is the amount of depreciation expense that needs to be brought up to date prior to the sale? $370 $480 $200 $740
am. 88.
Current Attempt in Progress In 2025, Sheffield Corporation discovered that equipment purchased on January 1, 2023, for $45,000 was expensed at that time. The equipment should have been depreciated over 5 years, with no salvage value. The effective tax rate is 30%. Prepare Sheffield's 2025 journal entry to correct the error. Sheffield uses straight-line depreciation. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. List all debit entries before crèdit entries.) Account Titles and Explanation Debit Credit 000
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Popeye Company purchased a machine for $340,000 on January 1, 2020. Popeye depreciates machines of this type by the straight-line method over a five-year period using no salvage value. Due to an error, no depreciation was taken on this machine in 2020. Popeye discovered the error in 2021. What amount should Popeye record as depreciation expense for 2021? The tax rate is 25%. Multiple Choice $102,000. $136,000. $51,000. $68,000.
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