FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:7. Royal Company purchased a dump truck at the beginning of 2012 at a cost of $60,000. The truck had an estimated life of 6 years and an estimated
residual value of $24,000. On January 1, 2014, the company made major repairs of $20,000 to the truck that extended the life 1 year. Thus, starting
with 2014, the truck has a remaining life of 5 years and a new salvage value of $8,000. Royal uses the straight-line depreciation method.
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- Daarrow_forwardColquhoun International purchases a warehouse for $332,000. The best estimate of the salvage value at the time of purchase was $17,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. A. Calculate annual depreciation expense for the first four years. $fill in the blank ae55fc07ff8d04f_1 B. Determine the depreciation expense for the final fifteen years of the asset’s life. $fill in the blank ae55fc07ff8d04f_2 C. Prepare the journal entry for year five. If an amount box does not require an entry, leave it blank. fill in the blank fill in the blank fill in the blank fill in the blankarrow_forward.arrow_forward
- The original equipment was purchased 3 years ago for $200,000 and was depreciating using the 5 Year MACRS depreciation schedule over 6 years. It has currently been depreciated 71% of the original cost. The equipment was planned to be sold at the end of it’s 5th year of use before it was fully depreciated for a salvage value in two years at an estimated $30,000. The old equipment has a current salvage value of $98,000.What's is the new NPV?arrow_forward.arrow_forwardOn January 1, 2003, Superior Landscaping Company paid P17,000 to buy a stump grinder. If Superior uses the grinder to remove 2,500 stumps per year, it would have an estimated useful life of 10 years and a salvage value of P4,500. The amount of depreciation expense for the year 2003, using units-of-production depreciation and assuming that 3,500 stumps were removed, is?arrow_forward
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