The Depreciators Inc purchases and begins using equipment costing $175 on Sept 1, 2020. There was an additional cost of $15 for delivery and installation. The Depreciators expects to use the equipment over a 3 year useful life and estimates the salvage value to be $10. DI uses the straight line method for calculating depreciation. Determine the following. Pay attention to the dates being asked!: a) Net Book Value of the equipment as of December 31, 2020 b) Depreciation Expense for the year ending Dec 31, 2021 $ c) Accumulated Depreciation for the year ending Dec 31, 2023 %24 %24
The Depreciators Inc purchases and begins using equipment costing $175 on Sept 1, 2020. There was an additional cost of $15 for delivery and installation. The Depreciators expects to use the equipment over a 3 year useful life and estimates the salvage value to be $10. DI uses the straight line method for calculating depreciation. Determine the following. Pay attention to the dates being asked!: a) Net Book Value of the equipment as of December 31, 2020 b) Depreciation Expense for the year ending Dec 31, 2021 $ c) Accumulated Depreciation for the year ending Dec 31, 2023 %24 %24
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![The Depreciators Inc purchases and begins using equipment costing $175 on Sept 1, 2020. There was an additional cost of $15 for delivery and installation.
The Depreciators expects to use the equipment over a 3 year useful life and estimates the salvage value to be $10. DI uses the straight line method for calculating depreciation.
**Determine the following. Pay attention to the dates being asked:**
a) Net Book Value of the equipment as of December 31, 2020
$ [________]
b) Depreciation Expense for the year ending Dec 31, 2021
$ [________]
c) Accumulated Depreciation for the year ending Dec 31, 2023
$ [________]
You **must** show your work on your PDF upload to receive credit. You may prepare journals, T Accounts, or a table to determine your answers. The choice is yours, but your calculations should be logically presented so I can follow what you have done.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F75227c3d-0045-449f-908c-0dff54e4e54b%2Fabccb62f-dcb4-4199-b3ae-81760aecbb06%2Fw5msf0b_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The Depreciators Inc purchases and begins using equipment costing $175 on Sept 1, 2020. There was an additional cost of $15 for delivery and installation.
The Depreciators expects to use the equipment over a 3 year useful life and estimates the salvage value to be $10. DI uses the straight line method for calculating depreciation.
**Determine the following. Pay attention to the dates being asked:**
a) Net Book Value of the equipment as of December 31, 2020
$ [________]
b) Depreciation Expense for the year ending Dec 31, 2021
$ [________]
c) Accumulated Depreciation for the year ending Dec 31, 2023
$ [________]
You **must** show your work on your PDF upload to receive credit. You may prepare journals, T Accounts, or a table to determine your answers. The choice is yours, but your calculations should be logically presented so I can follow what you have done.
Expert Solution
Step 1
Here in this question, we are required to calculate net book value of equipment as of December 31,2020 , Depreciation expense for the year ending Dec 31,2012, accumulated depreciation for the year ending Dec 31,2023.
Depreciation is reduction in value of asset due to wear and tear, technological advancement and due to other reasons.
Management decides depreciation method and estimated life based on their own estimates.
Under straight line method,
Management depreciate the value of asset on equal installment over a useful life of asset.
Depreciation = (Value of asset - Salvage value)/ Useful life
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