Sterling Equipment Ltd. purchased machinery for $80,000 with a salvage value of $5,000 and a 6-year useful life. The company initially used the straight-line method, but after two years, switched to the double-declining balance method. What is the depreciation expense for Year 3?
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- Loban Company purchased four cars for 9,000 each and expects that they will be sold in 3 years for 1,500 each. The company uses group depreciation on a straight-line basis. Required: 1. Prepare journal entries to record the acquisition and the first years depreciation expense. 2. If one of the cars is sold at the beginning of the second year for 7,000, what journal entry is required?Assume the same information as in RE11-3, except that Albany Corporation purchased the asset on April 1, Year 1. Calculate the depreciation for Year 1 and Year 2 using the double-declining-balance method. Round to the nearest dollar.NOS Corp. purchased equipment for $180,000. They sold the equipment at the end of three years for $147,000. If the expected useful life of the equipment was ten years with a residual value of $30,000, and they use straight-line depreciation, which of the following is true regarding the journal entry to record the sale of the equipment? Select one: a. Credit Gain on Sale for $23,000 b. Credit Gain on Sale for $6,000 c. Credit Gain on Sale for $9,000 d. Credit Gain on Sale for $3,000 e. Credit Gain on Sale for $12,000
- On January 1, 20X1, Bixby Inc. purchased equipment costing $75,000. The equipment is estimated to have a residual value of $6,000 and a four-year useful life. Part A: In the following chart, compare how much depreciation expense should be recorded each year of the asset’s life and over all four years if the company uses the straight-line versus the double-declining balance depreciation (DDB) method. Part B: Prepare the entry on 12/31/X2 to record depreciation expense for 20X2, assuming the straight-line depreciation method is used. Year Straight-Line Method DBB Method Year 1 of asset's life Year 2 of asset's life Year 3 of asset's life Year 4 of asset's life TotalHolman Company owns equipment with an original cost of $99,080 and an estimated salvage value of $7,040 that is being depreciated at $15,340 per year using the straight-line depreciation method, and only prepares adjustments at year-end. The adjusting entry needed to record annual depreciation is: Multiple Choice O O O Debit Depreciation Expense, $8,300; credit Equipment, $8,300. Debit Depreciation Expense, $15,340; credit Accumulated Depreciation, $15,340. Debit Depreciation Expense, $15,340; credit Equipment, $15,340. Debit Depreciation Expense, $8,300; credit Accumulated Depreciation, $8,300. Debit Equipment, $15,340; credit Accumulated Depreciation, $15,340.What amount will be reported for accumulated depreciation on these financial accounting question?
- On January 1, 20X1, Bixby Inc. purchased equipment costing $75,000. The equipment is estimated to have a residual value of $6,000 and a four-year useful life. If the asset had been placed into service on May 1, 20X1 instead of January 1, 20X1, what would be the depreciation expense recorded for the year ending 12/31/X1, assuming the straight-line method is used? Round to the nearest whole dollar.CHB, Inc. purchased equipment for $540,000 on May 1, 20X1. The estimated service life is five years with a $60,000 residual value. Depreciation expense for the year ended December 31, 20X1, using straight-line depreciation, is:What is the annual depreciation charge of this financial accounting question?
- Equipment was acquired at the beginning of the year at a cost of $550,000. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of 9 years and an estimated residual value of $46,070. A. What was the depreciation for the first year? Round your intermediate calculations to 4 decimal places. Round the depreciation for the year to the nearest whole dollar. B. Assuming that the equipment was sold at the end of the second year for $542,850, determine the gain or loss on the sale of the equipment. C. Journalize the entry on Dec. 31 to record the sale. Refer to the Chart of Accounts for exact wording of account titles.Assume that XYZ catering services paid $144,000 for equipment with a16 -year life and zero expected residual value. After using the equipment for six years, the company determines that the asset will remain useful for only five more years. Record depreciation expense on the equipment for year 7 by the straight-line method. First, select the formula to calculate the company's revised depreciation expense on the equipment for year 7. Then enter the amounts and calculate the depreciation for year 7.(Enter "0" for items with a zero value.) Revised ( Book value - Residual value ) / Revised useful life remaining = depreciationAssume that Smith's Auto Sales paid $45,000 for equipment with a 15-year life and zero expected residual value. After using the equipment for six years, the company determines that the asset will remain useful for only five more years. Read the requirements. Requirement 1. Record depreciation expense on the equipment for Year 7 by the straight-line method. First, select the formula to calculate the company's revised depreciation expense on the equipment for Year 7. Then enter the amounts and calculate the depreciation for Year 7. (Enter "0" for items with a zero value.) Revised depreciation ) + Record the depreciation on the equipment for Year 7. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit Requirements 1. Record depreciation expense on the equipment for Year 7 by the straight-line method. 2. What is accumulated depreciation at the end of Year 7? Print Done Requirement 2. What is…