FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- Corales Company acquires a delivery truck at a cost of $38,000. The truck is expected to have a salvage value of $6,000 at the end of its 4-year useful life.The truck is estimated to be driven 100,000 miles. Instructions: 1. Compute annual depreciation expense for the first and second years using the straight-line method. 2. Compute annual depreciation expense for the first and second years using the units of activity method. The truck is driven 20,000 miles the first year and 30,000 miles the second year. 3. Compute annual depreciation expense for all 4 years using the double declining balance method.arrow_forwardA draw bench for precision forming and strengthening of carbon steel tubing has a cost of $1,110,000. It will have a salvage value of $76,000 after a useful life of 10 years. Part a Using the formulas, determine the depreciation charge for year 8 and the book value at the end of year 8 if straight-line depreciation is used. Depreciation charge: Book value: $ $arrow_forwardMonster Inc. purchased a machine for $100,000 and depreciated it on a straight-line basis over a 10-year period. The machine has an estimated residual value of $10,000. After using the asset for 3 years, the management realized that the machine will wear out before 10 years. Starting in year 4, the company began depreciating the machine over a revised total life of 8 years. a. Calculate the depreciation expense for year 1 b. Calculate the book value of the machine after year 3 c. Calculate the depreciation expense for year 4 d. Calculate the book value of the machine after year 8arrow_forward
- Martin Company purchases a machine at the beginning of the year at a cost of $126,000. The machine is depreciated using the double-declining-balance method. The machine’s useful life is estimated to be 4 years with a $10,500 salvage value. The machine’s book value at the end of year 3 is:arrow_forwardRamirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $84,600. The machine's useful life is estimated at 20 years, or 393,000 units of product, with a $6,000 salvage value. During its second year, the machine produces 33,300 units of product. Determine the machine’s second-year depreciation and year end book value under the straight-line method.arrow_forwardColquhoun International purchases a warehouse for $301,000. The best estimate of the salvage value at the time of purchase was $16,000, and it is expected to be us for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determir that the warehouse will be useful for only another fifteen years. A. Calculate annual depreciation expense for the first four years. $ 171,000 B. Determine the depreciation expense for the final fifteen years of the asset's life. 11,400 X Feedback V Check My Work When revising deprecation schedules, the book value is used as the adjusting base to apply the new changes to when determine the revised yearly depreciation amount. C. Prepare the journal entry for year five. If an amount box does not require an entry, leave it blank. Depreciation Expense 171,000 X Accumulated Depreciation-Warehouse 171,000arrow_forward
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