Supreme Auto Service opened a new service center three decades ago. At the time the center was preparing to open, new equipment was purchased totaling $355,000. Residual value of the equipment was estimated to be $45,000 after 20 years. The company accountant has been using straight-line depreciation on the equipment. (a) How much was the annual depreciation for the original equipment (in $)? $ (b) If the hydraulic lift had originally cost $14,200, what would its residual value (in $) be after 20 years? $ (c) After six years of operation, the original hydraulic lift was replaced with a new model that cost $23,000. Book value was allowed for the old machine as a trade-in. What was the old hydraulic lift's book value when the replacement machine was bought (in $)? $ (d) What was the book value of the equipment inventory at the six-year point, substituting the new hydraulic lift for the original after the new lift had joined the inventory (in $)? $
Supreme Auto Service opened a new service center three decades ago. At the time the center was preparing to open, new equipment was purchased totaling $355,000. Residual value of the equipment was estimated to be $45,000 after 20 years. The company accountant has been using straight-line depreciation on the equipment. (a) How much was the annual depreciation for the original equipment (in $)? $ (b) If the hydraulic lift had originally cost $14,200, what would its residual value (in $) be after 20 years? $ (c) After six years of operation, the original hydraulic lift was replaced with a new model that cost $23,000. Book value was allowed for the old machine as a trade-in. What was the old hydraulic lift's book value when the replacement machine was bought (in $)? $ (d) What was the book value of the equipment inventory at the six-year point, substituting the new hydraulic lift for the original after the new lift had joined the inventory (in $)? $
Supreme Auto Service opened a new service center three decades ago. At the time the center was preparing to open, new equipment was purchased totaling $355,000. Residual value of the equipment was estimated to be $45,000 after 20 years. The company accountant has been using straight-line depreciation on the equipment. (a) How much was the annual depreciation for the original equipment (in $)? $ (b) If the hydraulic lift had originally cost $14,200, what would its residual value (in $) be after 20 years? $ (c) After six years of operation, the original hydraulic lift was replaced with a new model that cost $23,000. Book value was allowed for the old machine as a trade-in. What was the old hydraulic lift's book value when the replacement machine was bought (in $)? $ (d) What was the book value of the equipment inventory at the six-year point, substituting the new hydraulic lift for the original after the new lift had joined the inventory (in $)? $
Supreme Auto Service opened a new service center three decades ago. At the time the center was preparing to open, new equipment was purchased totaling $355,000. Residual value of the equipment was estimated to be $45,000 after 20 years. The company accountant has been using straight-line depreciation on the equipment.
(a)
How much was the annual depreciation for the original equipment (in $)?
$
(b)
If the hydraulic lift had originally cost $14,200, what would its residual value (in $) be after 20 years?
$
(c)
After six years of operation, the original hydraulic lift was replaced with a new model that cost $23,000. Book value was allowed for the old machine as a trade-in. What was the old hydraulic lift's book value when the replacement machine was bought (in $)?
$
(d)
What was the book value of the equipment inventory at the six-year point, substituting the new hydraulic lift for the original after the new lift had joined the inventory (in $)?
$
Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video
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