saved Mean Beans, a local coffee shop, has the following assets on January 1, 2023. Mean Beans prepares annual financial statements and has a December 31, 2023 year-end. The company's depreciation policy is to use the straight-line method to depreciate its assets. a. On January 1, 2023, purchase equipment costing $15,900 with an estimated life of five years. Mean Beans will scrap the equipment after five years for $0. b. On July 1, 2023, purchase furniture (tables and chairs) costing $21,800 with an estimated life of ten years. Mean Beans estimates that it can sell the furniture for $2,300 after ten years. c. On January 1, 2021, Mean Beans had purchased a car costing $43,500 with an estimated life of eight years. Mean Beans estimates that it can sell the car for $8,700 after eight years. Required: 1-a. For each transaction, calculate the current year's annual depreciation expense. a Annual depreciation expense on equipment b. Annual depreciation expense on furniture c Annual depreciation expense on car
saved Mean Beans, a local coffee shop, has the following assets on January 1, 2023. Mean Beans prepares annual financial statements and has a December 31, 2023 year-end. The company's depreciation policy is to use the straight-line method to depreciate its assets. a. On January 1, 2023, purchase equipment costing $15,900 with an estimated life of five years. Mean Beans will scrap the equipment after five years for $0. b. On July 1, 2023, purchase furniture (tables and chairs) costing $21,800 with an estimated life of ten years. Mean Beans estimates that it can sell the furniture for $2,300 after ten years. c. On January 1, 2021, Mean Beans had purchased a car costing $43,500 with an estimated life of eight years. Mean Beans estimates that it can sell the car for $8,700 after eight years. Required: 1-a. For each transaction, calculate the current year's annual depreciation expense. a Annual depreciation expense on equipment b. Annual depreciation expense on furniture c Annual depreciation expense on car
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Mean Beans, a local coffee shop, has the following assets on January 1, 2023. Mean Beans prepares annual financial statements and
has a December 31, 2023 year-end. The company's depreciation policy is to use the straight-line method to depreciate its assets.
a. On January 1, 2023, purchase equipment costing $15,900 with an estimated life of five years. Mean Beans will scrap the equipment
after five years for $0.
b. On July 1, 2023, purchase furniture (tables and chairs) costing $21,800 with an estimated life of ten years. Mean Beans estimates
that it can sell the furniture for $2,300 after ten years.
c. On January 1, 2021, Mean Beans had purchased a car costing $43,500 with an estimated life of eight years. Mean Beans estimates
that it can sell the car for $8,700 after eight years.
Required:
1-a. For each transaction, calculate the current year's annual depreciation expense.
a Annual depreciation expense on equipment
b. Annual depreciation expense on furniture
c Annual depreciation expense on car
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