Straight-Line Depreciation Method: Office Mart purchases a photocopier for $70,000. The photocopier has a salvage value of $7,000 and has expected life of seven years. Office Mart uses the straight-line depreciation method. • Calculate the annual depreciation expense. What is the year one book value? • What is the year three book value? • What is the year six accumulated depreciation?

Straight-Line Depreciation Method: Office Mart purchases a photocopier for $70,000. The photocopier has a salvage value of $7,000 and has expected life of seven years. Office Mart uses the straight-line depreciation method. • Calculate the annual depreciation expense. What is the year one book value? • What is the year three book value? • What is the year six accumulated depreciation?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

Apex Fitness Club uses straight-line depreciation for a machine costing $27,450, with an estimated four-year life and a $2,050 salvage value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which it will have an estimated $1,600 salvage value. 1. Compute the machine's book value at the end of its second year. 2. Compute the amount of depreciation for each of the final three years given the revised estimates. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the machine's value at the end of its second year. answers to the nearest whole dollar.) Book Value at the End of Year 2: Cost Accumulated depreciation 2 years Book value at point of revision $ 0 lations. Round your final
truck costing $20,000 was purchased on January 1, 2004. It was depreciated using the straight-line method with an estimated useful life of 4 years and a salvage value of $2,000. If the truck is sold at the end of 2005 for $6,000, how much gain or loss will be recognized?
3. Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for 120,000 miles. Montello uses the units-of-production depreciation method. Calculate the depreciation expense for years 1 and 2 assuming the truck was driven 23,000 miles in year 1 and 26,000 miles in year 2.
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 us for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determir that the warehouse will be useful for only another fifteen years. A. Calculate annual depreciation expense for the first four years. $ 171,000 B. Determine the depreciation expense for the final fifteen years of the asset's life. 11,400 X Feedback V Check My Work When revising deprecation schedules, the book value is used as the adjusting base to apply the new changes to when determine the revised yearly depreciation amount. C. Prepare the journal entry for year five. If an amount box does not require an entry, leave it blank. Depreciation Expense 171,000 X Accumulated Depreciation-Warehouse 171,000
Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one it expects to use the truck for 26,000 miles. Calculate the annual depreciation expense.
Delta Machine Company purchased a computerized assembly machine for $108,000 on January 1 Year 1 Delta Machine Company estimated that the machine would have a life of four years and a $11,000 salvage value: Delta Machine Company uses the straight-line method to compute depreciation expense. At the beginning of Year 3 Delta discovered that the machine was quickly becoming. obsolete and would have little value at the end of its useful life Consequently, Delta Machine Company revised the estimated salvage to only $3,000. It did not change the estimated useful life of the machine Compute the depreciation expense for each of the four years Years Year 12 Year 2 Year 3 Year 4 Depreciation Expense
An automated assembly robot that cost $352,000 has a depreciable life of 5 years with a $85,000 salvage value. The MACRS (Modified Accelerated Cost Recovery System) depreciation rates for years 1, 2, 3, and 6 are 20.00%, 32.00%, 19.20%, and 5.76%, respectively. What is the book value at the end of year 3? Year 5? Year 6? The book value at the end of year 3 is $ . The book value at the end of year 5 is $ . The book value at the end of year 6 is $ .
shobha
Mason Industries purchased a drilling rig for $75,900. Delivery costs totaled $2,831. The useful life is 7 years and the salvage value is $12,938. Prepare a depreciation schedule using the straight-line method.
At the beginning of Year 1, Copeland Drugstore purchased a new computer system for $52,000. It is expected to have a five-year life and a $7,000 salvage value. Required a. Compute the depreciation for each of the five years, assuming that the company uses (1) Straight-line depreciation. (2) Double-declining-balance depreciation. b. Record the purchase of the computer system and the depreciation expense for the first year under straight-line and double- declining-balance methods in a financial statements model. Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Compute the depreciation for each of the five years, assuming that the company uses straight-line depreciation.
Becker Office Service purchased a new computer system on January 1, Year 1, for $36,100. It is expected to have a five-year useful life and a $3,800 salvage value Becker Office Service expects to use the computer system more extensively in the early years of its life. Required a. Calculate the depreciation expense for each of the five years, assuming the use of straight-line depreciation. b. Calculate the depreciation expense for each of the five years, assuming the use of double-declining balance depreciation. d. Assume that Becker Office Service sold the computer system at the end of the fourth year for $20.500 Compute the amount of gain or loss using each depreciation method. Complete this question by entering your answers in the tabs below. Required A Required B Calculate the depreciation expense for each of the five years, assuming the use of straight-line depreciation. Year 1 2 3 4 5 Required D Annual Depreciation Required B >
Hemisphere Bank purchased a $100,000 online document imaging system with a depreciation recovery period of 5 years. Determine the depreciation for (a) the SL method and (b) DDB-to-SL switching. (c) Use a rate of i = 15% peryear to determine the PWD values. (MACRS is not involved in this example.)

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS