Financial accounting Waco Company was started on January 1, 2011, when it issued common stockfor $15,000 cash. Also on January 1, 2011, the company purchased officeequipment that cost $15,000 cash. The equipment was delivered under termsof FOB shipping point, and the transportation cost was $1,000. The equipmenthad a five-year useful life and a $1,200 expected salvage value.Using straight-line depreciation, determine the amount of depreciationexpense and the amount of accumulated depreciation that would appear onthe December 31, 2013, financial statements.a. $2,608/$7,824.b. $2,960/$2,960.c. $2,600/$7,800.d. $2,960/$8,880.

Step 1: Define Accounting for DepreciationCompanies buy property, plant, and equipment to use over…

Answered: Waco Company was started on January 1,…

Century 21 Accounting General Journal

11th Edition

ISBN:9781337680059

Author:Gilbertson

Publisher:Gilbertson

Chapter19: Accounting For Plant Assets, Depreciation, And Intangible Assets

Section: Chapter Questions

Problem 1AFE

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Frey, Inc. purchased a machine for $600,000 on January 2, 2017. The machine has an estimated useful life of 4 years and a salvage value of $100,000. The machine is being depreciated using the sum-of-the-years'-digits method. The December 31, 2018 asset balance, net of accumulated depreciation, should be: Select one: a. $250,000 Ob. $350,000 c. $280,000 Od. $320,000 $450,000
Novak Corporation purchased machinery on January 1, 2017, at a cost of $270,000. The estimated useful life of the machinery is 4 years, with an estimated salvage value at the end of that period of $24,000. The company is considering different depreciation methods that could be used for financial reporting purposes. Prepare separate depreciation schedules for the machinery using the straight-line method, and the declining-balance method using double the straight-line rate. STRAIGHT-LINE DEPRECIATION Computation End of Year Years Depreciable Cost x Depreciation Rate = Annual Depreciation Expense Accumulated Depreciation Book Value 2017 $ $1 2$ 2018 2019 % 2020 % DOUBLE-DECLINING-BALANCE DEPRECIATION Computation End of Year Years Book Value Beginning of Year x Depreciation Rate = Annual Depreciation Expense Accumulated Depreciation Book Value 2017 $ 2018 2019 2020 9,750 * Depreciation expense for 2020 under Double declining-balance is adjusted so that ending book value is equal to salvage…
On January 1, 2017, Bushong Company purchased equipment at a cost of $12,600. The equipment had an estimated useful life of 6 years or 30,000 hours. The equipment will have a $1,200 salvage value at the end of its life. The depreciation expense for the year ending December 31, 2017, using the straight-line method would be a.$471. b.$1,900. c.$1,883. d.$475.
Equipment was acquired on January 1, 2013, at a cost of $75,000. The equipment was originally estimated to have a salvage value of $5,000 and an estimated life of 10 years. Depreciation has been recorded through December 31, 2016, using the straight-line method. On January 1, 2017, the estimated salvage value was revised to $7,000 and the useful life was revised to a total of 8 years. (A) Calculate the book value at the time of the revision (January 1, 2017). (B) Determine the depreciation expense for 2017
Clean Corporation purchased a depreciable asset for $1,560,000 on January 1, 2015. The estimated salvage value is $120,000, and the estimated useful life is 9 years. The straight-line method is used for depreciation. On January 1, 2018, Hollander changed its estimates to a total remaining useful life of 8 years with a salvage value of $200,000. What is 2018 depreciation expense? A) $160,000 OB) $200,000 C) $240,000 D) $110,000
Clean Corporation purchased a depreciable asset for $1,560,000 on January 1, 2015. The estimated salvage value is $120,000, and the estimated useful life is 9 years. The straight-line method is used for depreciation. On January 1, 2018, Hollander changed its estimates to a total remaining useful life of 8 years with a salvage value of $200,000. What is 2018 depreciation expense? A) $160,000 (B) $200,000 (C) $240,000 (D) $110,000
Micah Bartlett Company purchased equipment on January 1, 2016, at a total invoice cost of $400,000. The equipment has an estimated salvage value of $10,000 and an estimated useful life of 5 years. The amount of accumulated depreciation at December 31, 2017, if the straight-line method of depreciation is used, Is: Select one: a. $156,000. b. $80,000. C. $160,000. d. S78,000.
Sargent Corporation bought equipment on January 1, 2017. The equipment cost $360,000 and had an expected salvage value of $60,000. The life of the equipment was estimated to be 6 years. Assuming straight-line deprecation, the book value of the equipment at the beginning of the third year would be Select one: a. $150,000. b. $260,000. c. $360,000. d. $100,000.
Antigua Company purchased a depreciable asset for $45,000 on October 1, 2015. The estimated salvage value is $9,000, and the estimated useful life is 6 years. The straight-line method is used for depreciation. What is the book value on July 1, 2017 when the asset is sold?
Coppola Company purchased a machine on January 1, 2016, for $20,000 cash. In addition, Coppola paid $4,000 to have the machine delivered and installed. The estimated useful life of the machine is 4 years, after which time it is expected to have a salvage value of $8,000. It is also estimated that the machine will produce 200,000 units of product during its useful life. Assuming that the straight-line depreciation method is used, what will be the machine's carrying amount on December 31, 2018? a.$8,000 b.$14,000 c.$12,000 d.$16,000
Slotkin Products purchased a machine for $39,000 on July 1, 2014. The company intends to depreciate it over 8 years using the double-declining balance method. Salvage value is $3,000. Depreciation for 2015 to the closest dollar is A.$8,531 B.$19,500 C.$4,875 D. $7,500

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