Revised Depreciation On January 2, 2016, the Fish Band acquires sound equipment for concert performances at a cost of $65,800. The band estimates it will use this equipment for four years. It estimates that after four years it can sell the equipment for $2,000. Fish Band uses straight-line depreciation but realizes at the start of 2017 that due to concert bookings beyond expectations, this equipment will last only a total of three years. The salvage value remains unchanged. Compute the revised depreciation for both the second and third years.

Revised Depreciation On January 2, 2016, the Fish Band acquires sound equipment for concert performances at a cost of $65,800. The band estimates it will use this equipment for four years. It estimates that after four years it can sell the equipment for $2,000. Fish Band uses straight-line depreciation but realizes at the start of 2017 that due to concert bookings beyond expectations, this equipment will last only a total of three years. The salvage value remains unchanged. Compute the revised depreciation for both the second and third years.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On January 1,2013, a new building was purchased at a cost of $30,000,000. Depreciation was computed on the straight-line basis at 4% per year. On January 1,2016, the building was appraised and was reported to have a fair value of $36,000,000 and an estimated remaining life of 15 years. This was the first revaluation made in the building since acquisition. What is the revised depreciation expense on the building for 2016?
DEF manufacturing company, a calendar-year company, purchased a machine for P650,000 on January 1,2008. At the date of purchase, DEF incurred the following additional costs: Loss on sale of old machinery P15,000 Freight cost 5,000 Installation costs 20,000 Testing costs prior to regular operation 4,000 The estimated salvage value of the machine was P50,000 and DEF estimated that the machine would have a useful life of 20 years, with depreciation being computed using the straight line method. In January 2010, accessories totaling P48,600 were added to the machine in order to reduce its operating costs. These accessories neither prolonged the machine’s life nor did they provide additional salvage value. What is the depreciation for 2010?
Orange Company purchased a drilling machine in 2010 for P240,000. The machine was depreciated on the straight-line method over an estimated useful life of 20 years, with no salvage value. At the beginning of 2020, when the machine had been in use for 10 years, the company paid P40,000 to overhaul the machine. As a result of this improvement, the company estimated that the useful life of the machine would be extended an additional 5 years. What would be the depreciation expense recorded for the machine in 2020? * P8,000 P10,667 P12,000 P14,667 answer not given
On January 1, 2016, Rexford Company purchased a drilling machine for $11,500. The machines has an estimated useful life of 4 years and a salvage value of $200. Given this information, if Rexford uses double-declining-balance method of depreciation, and sells the machine on December 31, 2017, for $3,000 cash. Then how much will be gain or loss on disposal of this asset? $ 2,750 loss $ 1,800 loss $1,562 gain $ 125 gain
Required information [The following information applies to the questions displayed below.] On January 1, the Matthews Band pays $69,000 for sound equipment. The band estimates it will use this equipment for five years and perform 200 concerts. It estimates that after five years it can sell the equipment for $2,000. During the first year, the band performs 55 concerts. Compute the first-year depreciation using the straight-line method. Choose Numerator: Straight-Line Depreciation Choose Denominator: Annual Depreciation Expense = Depreciation expense W
A store building was constructed on January 2, 2009 with a cost of P570,000. Its estimated useful life is 16 years with scrap value of P70,000 after 16 years. In January, 2014 replacement of some worn-out parts of the building costing P50,000 was spent. After the repairs, the building was appraised with a fair market value of P770,000. The allowable deduction for depreciation for the year 2014 is:
On January 1, 2021, Montana Enterprises purchased a $100,000 semi-trailer truck. In 2021 and 2022, Montana depreciated the truck using the straight-line method with an estimated 10 year useful life and an estimated $10,000 salvage value. At the beginning of 2023, Montana decided to adjust the initial estimates. The company now believes the truck will last a total of 15 years and have a salvage value of $17,000. At December 31, 2023, what will be the truck's adjusted book value reflecting the change in estimate? Multiple Choice O $73,000 $83,400 $85,000 $77,000
Lugar Company purchased a piece of machinery for $28,500 on January 1, 2016, and has been depreciating the machine using the sum-of-the-years'-digits method based on a five-year estimated useful life and no salvage value. On January 1, 2018, Lugar decided to switch to the straight-line method of depreciation. The salvage value is still zero and the estimated useful life is changed to a total of six years from the date of purchase. Ignore income taxes. Required:1. Prepare the appropriate journal entry, if any, to record the accounting change under GAAP.2. Prepare the journal entry to record depreciation for 2018.
Colquhoun International purchases a warehouse for $301,000. The best estimate of the salvage value at the time of purchase was $16,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. A. Calculate annual depreciation expense for the first four years. $? B. Determine the depreciation expense for the final fifteen years of the asset’s life. $? C. Prepare the journal entry for year five. If an amount box does not require an entry, leave it blank.
Lone Star Sales & Service acquired a new machine that cost $84,000 in early 2016. The machine is expected to have a five-year useful life and is estimated to have a salvage value of $14,000 at the end of its life. Using the double-declining-balance depreciation method, calculate the depreciation expense for the third year of the machine's life and the net book value of the machine at this point in time.
On January 2, 2017, Cancer Company purchased transportation equipment costing P2,400,000. The new asset has an estimated useful life of 8 years with no salvage value. Cancer Company depreciates this type of asset using the straight-line method. On January 2, 2019, Cancer determined that the machine has a useful life of 6 years from the date of acquisition with no salvage value. As a result of the change in the estimated useful life of the asset, what is the carrying amount of the transportation equipment as of December 31, 2019?
Bonita Industries purchased a new machine on May 1, 2012 for $561600. At the time of acquisition, the machine was estimated to have a useful life of ten years and an estimated salvage value of $30000. The company has recorded monthly depreciation using the straight-line method. On March 1, 2021, the machine was sold for $67800. What should be the loss recognized from the sale of the machine?