FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Alexander Company purchased a piece of equipment for $12,000 and
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- Colquhoun International purchases a warehouse for $325,000. The best estimate of the salvage value at the time of purchase was $15,000, 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 b2a4a0fccfb4fa2_1 B. Determine the depreciation expense for the final fifteen years of the asset’s life. $fill in the blank b2a4a0fccfb4fa2_2 C. Prepare the journal entry for year five. If an amount box does not require an entry, leave it blank.arrow_forwardHampton Inc. purchased a machine to use in its business. The machine is estimated to have an economic life of 10 (ten) years before it becomes obsolete. The company expects to use the machine for 4 (four) years before it sells the machine to another company. Hampton uses the straight-line depreciation method. Question: How many years should Hampton depreciate this asset over? (4,7,10, or 14)arrow_forwardSage Ltd. owned several manufacturing facilities. On September 15 of the current year, Sage decided to sell one of its manufacturing buildings. The building had cost $6,325,000 when originally purchased 5 years ago, and had been depreciated using the straight-line method with no residual value. Sage estimated that the building had a 25-year life when purchased. Prepare the journal entry to record the sale of the building on Sage's books, assuming 5 years of depreciation has already been recorded in the accounts to the date of disposal. The building was sold for $5,250,000 cash. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Sept. 15 List of Accounts…arrow_forward
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