2. A truck with a useful life of 7 years and a residual value of $0 was purchased for $49,000 on January 1. What is depreciation expense in year 5 under the straight line method?
2. A truck with a useful life of 7 years and a residual value of $0 was purchased for $49,000 on January 1. What is depreciation expense in year 5 under the straight line method?
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 1CP
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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
How do I solve 2,3 and 4
![Answer the following questions related to depreciation expense calculation. Be sure
to read each question carefully.
NOTE: (Round Each Answer to the Nearest dollar, Do NOT use any Commas, Dollar
Signs or Periods. - Example 6000).
1. A machine with a useful life of 12 years and residual value of $10,000 was
purchased for $120,000 on January 1. What is the annual depreciation expense
using the straight line method? 9167
2. A truck with a useful life of 7 years and a residual value of $0 was purchased for
$49,000 on January 1. What is depreciation expense in year 5 under the straight
line method?
3. A machine with a useful life of 5 years and residual value of $2,000 was
purchased for $30,000 on January 1. What is the depreciation expense in year 2
using the double declining balance method?
4. A Semi-Truck with a useful life of 7 years and residual value of $50,000 was
purchased for $225,000 on January 1. What is the depreciation expense for year
2 using the double declining balance? (NOTE: For your DDB Rate calculation,
Round the amount final amount to Three Decimal Places (.398 or 39.8%))](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0820ea24-d641-4eb3-9ad5-40c6d2ab6348%2F9825da7d-5937-4c28-a43c-dfaa4bdde7fb%2Flvcrr8e9_processed.png&w=3840&q=75)
Transcribed Image Text:Answer the following questions related to depreciation expense calculation. Be sure
to read each question carefully.
NOTE: (Round Each Answer to the Nearest dollar, Do NOT use any Commas, Dollar
Signs or Periods. - Example 6000).
1. A machine with a useful life of 12 years and residual value of $10,000 was
purchased for $120,000 on January 1. What is the annual depreciation expense
using the straight line method? 9167
2. A truck with a useful life of 7 years and a residual value of $0 was purchased for
$49,000 on January 1. What is depreciation expense in year 5 under the straight
line method?
3. A machine with a useful life of 5 years and residual value of $2,000 was
purchased for $30,000 on January 1. What is the depreciation expense in year 2
using the double declining balance method?
4. A Semi-Truck with a useful life of 7 years and residual value of $50,000 was
purchased for $225,000 on January 1. What is the depreciation expense for year
2 using the double declining balance? (NOTE: For your DDB Rate calculation,
Round the amount final amount to Three Decimal Places (.398 or 39.8%))
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