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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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A company purchased factory equipment for $710000. It is estimated that the equipment will have a $66000 salvage value at the end of its estimated 5-year useful life. If the company uses the double-declining-balance method of depreciation , the amount of annual depreciation recorded for the second year after purchase would be
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- Podey Company has a machine that originally cost $20,000, has accumulated depreciation of $14,000 at the beginning of the current year, and is being depreciated at $2,000 per year with the straight-line method. If the company sells the machine for $2,400 on September 30, it first records a depreciation expense of $500. $1,500. $3,600. $6,000.arrow_forwardOn January 1, 2018. Questor Airlines purchased a used airplane for $53,600,000. Questor Airlines expects the plane to remain useful for five years (6,000,000 miles) and to have a residual value of $5,600,000. The company expects the plane to be flown 1,100,000 miles the first year. Read the requirements Begin by selecting the formula to calculate the company's first-year depreciation expense on the plane using the straight-line method. Then enter the amounts and calculate the depreciation for the first year. = Straight-line depreciation Requirement 1b. Compute Questor Airlines's first-year depreciation expense on the plane using the units-of-production method. Before calculating the first-year depreciation expense on the plane using the units-of-production method, calculate the depreciation expense per unit. Select the formula, then enter the amounts and calculate the depreciation per unit. Depreciation per unit Now, select the formula, enter the amounts, and calculate the company's…arrow_forwardGiven a cost of a depreciable fixed asset of $24,000 with a salvage value of $2,000 and a life of 5 years, what is the annual depreciation of the fixed asset using the straight-line method? What would be the depreciation in the second year if it used the declining balance method at double the straight-line rate? In regards to question #1, if the company used the straight-line method and sold the asset after 4 years for $7,000, what would be the journal entry needed to record the transaction? What if they sold it for $5,000?arrow_forward
- Company D recently purchased an equipment that costs $50,000, has a life of 4 years and a salvage value of $10,000. The production output of this equipment is 1800 on the first year, 2200 on the second year, 3000 units on the third year, and 4000 units on the fourth year. What is the accumulated depreciation charge on the second year?arrow_forwardA company purchased factory equipment for $640000. It is estimated that the equipment will have a $62000 salvage value at the end of its estimated 5-year useful life. If the company uses the double-declining-balance method of depreciation, what would be the amount of annual depreciation recorded for the second year after purchase?arrow_forwardAt the beginning of Year 1, Sophie Mopey Company buys a truck for $100,000 and estimates it has a useful life of 10 years and a salvage value of $6,000. The company estimates it will be able to drive the truck 188,000 miles before it has to be replaced, and drives it 30,000 miles in Year 1. Which of the following would be recorded under STRAIGHT-LINE depreciation? O Depreciation Expense of $15,957 in Year 1 O Depreciation Expense of $9,400 in Year 1 O Depreciation Expense of $20,000 in Year 1 O Depreciation Expense of $10,000 in Year 1 O Depreciation Expense of $18,800 in Year 1 O Depreciation Expense of $15,000 in Year 1 QUESTION 2 B 2arrow_forward
- bhavesharrow_forwardA plant asset cost $313600 and is estimated to have a $37000 salvage value at the end of its 8-year useful life. The annual depreciation expense recorded for the third year using the double-declining-balance method would be O $31170. O $39036. O $27720. O $44100.arrow_forwardSandhill Company bought machinery on January 1, 2009, at a cost of $90,000. The machinery had an estimated life of 8 years and salvage value of $15,680. On January 1, 2014, Sandhill estimates that the machinery will have a life of only 2 more years from January 1, 2014, and the salvage value is now estimated to be $3,920. Sandhill uses straight-line depreciation. Compute the annual depreciation expense for 2014. Annual depreciation expense for 2014 $arrow_forward
- Cullumber Corporation issues $430,000 of bonds for $447,200. (a) Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation eTextbook and Media List of Accounts Debit Creditarrow_forwardOn April 1, year 1, ABC. Ltd. purchased a piece of equipment for $ 440000 plus installation costs of $ 60000 that were necessary to make the equipment operational. ABC. Ltd. has a December 31, fiscal year end and uses the straight line depreciation method. The piece of equipment is expected to have a useful life of 10 years at which time it will have a residual value of $ 20000. What is the book value of the equipment as of December 31, year 3. Round your answer to the nearest dollar.arrow_forwardThe double-declining-balance method is to be used for an asset with a cost of $90.000. estimated salvage value of $ 12.000. and estimated useful life of five years.(a) What is the depreciation for the first three tax years, assuming that the asset was placed in service at the beginning of the year?(b) If switching to the straight-line method is allowed, when is the optimal time to switch?arrow_forward
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