### Educational Website Content---**Question: Depreciation Calculation Using Straight-Line Method****Scenario:**Vaughn Company purchased a machine on January 1, 2019, for $59,000 with an estimated salvage value of $25,000 and an estimated useful life of 8 years. On January 1, 2021, Vaughn decides the machine will last 12 years from the date of purchase. The salvage value is still estimated at $25,000. **Question:**Using the straight-line method, the new annual depreciation will be:1. $25502. $28333. $34004. $4917---**Response Information:**- **Your answer is incorrect.****Explanation:**To calculate the new annual depreciation using the straight-line method, follow these steps:1. **Calculate Net Book Value at the Change Date (January 1, 2021):** - Initial Cost: $59,000 - Salvage Value: $25,000 - Estimated Useful Life: 8 years - Annual Depreciation (original): $\frac{59,000 - 25,000}{8} = 4,250$ - Depreciation for 2 years: 2 x $4,250 = $8,500 - Net Book Value (1 January 2021): $59,000 - $8,500 = $50,5002. **Recalculate Depreciation with Revised Useful Life:** - New Useful Life from 2019: 12 years - Remaining Life (as of 2021): 12 - 2 = 10 years - New Annual Depreciation: $\frac{50,500 - 25,000}{10} = $2,550$So, the correct answer is:- **$2,550**This comprehensive explanation details the straight-line depreciation recalculation process. **Feedback Section:**Feel free to ask any further questions or seek explanations for related topics!---**End of Content**

Name: ### Educational Website Content---**Question: Depreciation Calculatio
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: ### Educational Website Content---**Question: Depreciation Calculation Using Straight-Line Method****Scenario:**Vaughn Company purchased a machine on January 1, 2019, for $59,000 with an estimated salvage value of $25,000 and an estimated useful lif

Depreciation is charged on the assets indicating the decrease in the value of the asset.…

Business

Accounting

Vaughn Company purchased a machine on January 1, 2019, for $59000 with an estimated salvage value of $25000 and an estimated useful life of 8 years. On January 1, 2021, Vaughn decides the machine will last 12 years from the date of purchase. The salvage value is still estimated at $25000. Using the straight-line method, the new annual depreciation will be O $2550. O $2833. O $3400. O $4917.

Vaughn Company purchased a machine on January 1, 2019, for $59000 with an estimated salvage value of $25000 and an estimated useful life of 8 years. On January 1, 2021, Vaughn decides the machine will last 12 years from the date of purchase. The salvage value is still estimated at $25000. Using the straight-line method, the new annual depreciation will be O $2550. O $2833. O $3400. O $4917.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Sheffield Corp. purchased a truck at the beginning of 2020 for $110500. The truck is estimated to…

A: Depreciation Expense = (Cost − Salvage Value) * Miles Driven…

Q: Sunland Company purchased a machine on July 1, 2020, for $970000. The machine has an estimated…

A: The rate of depreciation under 150% declining balance method is calculated by dividing 150 by the…

Q: Duval Industries purchases $110,000 of machinery on January 1, 2020. The machinery is expected to…

A: Depreciation expense:— It is the allocation of depreciable cost of asset over the estimated useful…

Q: Provide the journal entries necessary to account for all the above transactions and events up to 1…

A: Journal entries is the recording of the business transactions in a manner which gives dual effect of…

Q: purchased on January 01, 2019 for $600,000. The expected life is 8 years. salvage value is $10000.…

A: Formula: Straight line method = ( Asset cost - Salvage value ) / Useful life

Q: The Fisher Company purchased a machine on October 1, 2018, for $18,000. At the time of acquisition,…

A: Depreciable cost=Cost-Salvage value=$18,000-$5,000=$13,000

Q: Union Industries purchased equipment for $86,000 on January 1st, 2022. The useful life of the…

A: Depreciation is a reduction in value of asset due to wear and tear, technological advancement, other…

Q: was the gain/ loss on the sale of the machine?

A: Solution Prepared the Machinery Account for Calculate the Gain or Loss on sale of Machinery

Q: Around Jan 1, 2022, Coach Whip Corporation paid P5,000 for a piece of machinery. The same was…

A: A revaluation is an upward adjustment of a country's official exchange rate compared to a…

Q: Matlock inc .acquires a delivery at cost of $50000 on January 1,2022. The truck is expected to…

A: Depreciation is a reduction in the value of assets due to the usage of that asset. We can evaluate…

Q: Crane Company purchased a depreciable asset for $680000 on April 1, 2018. The estimated salvage…

A: Introduction: Depreciation: Decreasing value of fixed assets over its useful life period called as…

Q: Gandolfi Construction Company purchased a CAT 336DL earth mover at a cost of $415,000 in January…

A: Depreciation: It implies a decrease or gradual fall in the value of fixed assets being used by the…

Q: Sheridan Corporation bought equipment on January 1, 2021. The equipment cost $354000 and had an…

A: Under Straight line method, depreciable amount if an asset is evenly spread over its life.…

Q: Dolores Corporation acquired Machine costing P500,000 on January 2, 2021. The estimated useful life…

A: DEPRECIATION EXPENSE Depreciation means gradual decrease in the value of an asset due to normal…

Q: d book value at December 31, 2022 using the straight-line method and the double-declining-balance…

A: 1) a. Straight Line Method Depereciation P.a = [(Original Cost - Residual value (if any ) ] /…

Q: Coronado Company purchased

A: Business entities are required to compute the depreciation expense so that in the balance the assets…

Q: On January 1, 2019, Williams Company purchased a copy machine. The machine costs $160,000, its…

A: Depreciation Expenses - Depreciation Expenses are the expense incurred on the wear and tear of the…

Q: Alex Company purchased a lathe on January 1, 2022, at a cost of $45,000. At the time of purchase,…

A: Straight-line depreciation is a method of allocating the cost of an asset evenly over its estimated…

Q: On October 1, 2021, Bonita Company places a new asset into service. The cost of the asset is $115000…

A: The straight-line method of depreciation is a common way of allocating the cost of the asset to the…

Q: Richard Co. incurred research and development costs in 2021 as follows: Equipment acquired for use…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: n January 1, 2019, ABC Company acquired a machine for 4,500,000. The machine has a useful life of 10…

A: A corporation can use the revaluation model to carry a fixed asset at its revalued value. Following…

Q: The Vladimir Corporation purchased an equipment on January 1, 2020. The machine cost P 92,000, with…

A: Depreciation is used to denote a decrease in the value of fixed assets. Depreciation is the…

Q: year life and $10500 salvage value at the end of its useful life. What is the depreciation expense…

A: Straight line method of depreciation is the easiest method of depreciation where depreciation for…

Q: Tamarisk Company purchased a computer for $9,280 on January 1, 2019. Straight-line depreciation is…

A: Depreciation is a reduction in the value of assets due to the usage of that asset. We can evaluate…

Q: Q1. What will be the value of accumulated depreciation in the year of 2021?

A: Depreciation refers to the loss in the value of a tangible asset over a period of time. There are…

Q: On January 2, 2018 Careful Corporation purchased security equipment for $44,000 cash. The equipment…

A: From January 2, 2018 to December 31, 2020 = 3 years Annual depreciation = ($44,000 - $4,000) / 8…

Q: Marigold A.Ş. purchased a piece of equipment at the beginning of 2019. The equipment cost t 431,720.…

A: Sum of year = 8 + 7 + 6 + 5 + 4 + 3 + 2 + 1 = 36

Q: XYZ Company purchased a machine on January 1, 2022, for $50,000. The machine has an estimated useful…

A: Depreciation expenditures are a financial representation of an asset's wear and tear, aging, or…

Q: Crane Company purchased a machine on July 1. 2020, for $900000. The machine has an estimated useful…

A: The declining balance method is a method of charging the depreciation in which the higher amount of…

Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

Topic Video

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Meman
On January 1, 2020, Grand Manufacturing purchased a machine for $870,000 that it expected to have a useful life of five years. The company estimated that the residual value of the machine was $120 000 Grand Manufacturing used the machine for two years and sold it on January 1, 2022, for $340.000 As of December 31, 2021, the accumulated depreciation on the machine was $300,000 Read the requirements 1. Calculate the gain or loss on the sale of the machinery (Use a minus sign or parentheses for a loss) Gain or (loss) on the sale of the machinery Requirements 1. Calculate the gan or loss on the sale of the machinery 2. Record the sale of the machine on January 1, 2022 Print Done
Bonita Industries purchased a depreciable asset for $591000 on April 1, 2018. The estimated salvage value is $51000, and the estimated total useful life is 5 years. The straight-line method is used for depreciation. What is the balance in accumulated depreciation on May 1, 2021 when the asset is sold? $297000 $333000 $288000 $252000
Speedbag, Incorporated purchased equipment at a cost of $60,000 on July 1, 2023. The expected useful life is 4 years and the asset is expected to have salvage value of $10,000. Speedbag depreciates its assets using the straight-line method. What is the accumulated depreciation for this asset on December 31, 2024? Multiple Choice $30,000 $12,500 $25,000 $18,750
Alt Company purchased a new piece of manufacturing machinery on January 2, 2021. The machine had a total cost of $392,000 and an estimated salvage value of $125,000. Its useful life is estimated to be 6 years; over its life, it should produce 2,000,000 units of product. During 2022, the machine produced 309,000 units. Show calculations on tab for the amount of depreciation expense Alt will recognize in 2022 under straight-line, units-of-production, and double-declining depreciation methods. Depreciation was recorded normally for 2021. You are calculating depreciation for the second year in the machine’s life.
Machinery purchased for $65,400 by Bonita Co. in 2021 was originally estimated to have a life of 8 years with a salvage value of $4,360 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2026, it is determined that the total estimated life should be 10 years with a salvage value of $4,905 at the end of that time. Assume straight-line depreciation. (a) Prepare the entry to correct the prior years' depreciation, if necessary. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List debit entry before credit entry.) Account Titles and Explanation Debit Credit
On October 1, 2022, Sandhill Co. places a new asset into service. The cost of the asset is $103500 with an estimated 5-year life and $22500 salvage value at the end of its useful life. What is the depreciation expense for 2022 if Sandhill Co. uses the straight-line method of depreciation? O $4050. O $10350. O $20700. O $5175.
On July 1, 2019, Cullumber Company purchased new equipment for $90,000. Its estimated useful life was 6 years with a $12,000 salvage value. On December 31, 2022, the company estimated that the equipment’s remaining useful life was 10 years, with a revised salvage value of $5,000. Compute the revised annual depreciation on December 31, 2022.
purchased on Fanuary 01 , 2019 for $600.000. The expected life is 8 years. salvage value is $10000. Calculate the second year depreciation amount using the straight line method.
Tinker Bell Company sold a delivery wing truck on March 1, 2022. Tinker had acquired the wing truck on January 1, 2019, for $ 52,000. At acquisition, Tinker had estimated that the truck would have a useful life of 6 years and a residual value of $4,000. On December 31, 2021, the truck had a book value of $ 28,000. Required: Prepare the journal entries to recognized the depreciation expense for 2022 prior to the sale and the sale of the truck assuming the truck sold at the following different prices (you will have 3 entries total): $32,000 26,000
Visahno
On September 30, 2021, Bricker Enterprises purchased a machine for $200,000. The estimated service life is 10 years with a $20,000 residual value. Bricker records partial-year depreciation based on the number of months in service.Depreciation (to the nearest dollar) for 2022, using sum-of-the-years'-digits method, would be: Multiple Choice $31,909. $29,455. $35,456. $54,000.