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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When depreciation is recorded each period, what account is debited? a. Depreciation Expense b. Cash c. Accumulated Depreciation d. The fixed asset account involved Use the following information for Multiple-Choice Questions 7-4 through 7-6: Cox Inc. acquired a machine for on January 1, 2019. The machine has a salvage value of $20,000 and a 5-year useful life. Cox expects the machine to run for 15,000 machine hours. The machine was actually used for 4,200 hours in 2019 and 3,450 hours in 2020.
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.
Martin Corporation acquired a truck on January 1, 2016, at a cost of $84,000. The truck was originally estimated to have a salvage value of $4,000 and an estimated useful life of 8 years. Depreciation had been recorded through December 31, 2018, using the straight-line method. On January 1, 2019, the estimated salvage value was revised to $6,000, and the useful life was revised to a total of 7 years. Required: (Show all calculations) Calculate the annual depreciation expense for the years 2016 through 2018. a. b. Calculate the book value of the truck at December 31, 2018. с. Calculate the depreciation expense per year after revision. d. If the truck is sold at a gain, how is the statement of financial position affected?
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?
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