Blossom Company purchased a large piece of equipment on October 1, 2023. The following information relating to the equipment was gathered at the end of October: Price Credit terms $40,000 2/10, n/30 Engineering costs $3,000 Maintenance costs during regular production operations $6,000 It is expected that the equipment could be used for 12 years, after which the salvage value would be zero. Blossom intends to use the equipment for only 10 years, however, after which it expects to be able to sell it for $2,600. The equipment was delivered on October 1 and the invoice for the equipment was paid on October 9, 2023. Blossom uses the calendar year to prepare financial statements. Blossom follows IFRS for financial statement purposes. (a) Calculate the depreciation expense for the years indicated using the following methods. (Do not round intermediate calculations. Round final answers to 0 decimal places, e.g. 5,275.) 1. Straight-line method for 2023 $ 2. Sum-of-the-years'-digits method for 2024 $ 3. Double-declining-balance method for 2023 $ P

Blossom Company is considering the purchase of a new machine. The invoice price of the machine is $151,000, freight charges are estimated to be $4,000, and installation costs are expected to be $6,000. The salvage value of the new equipment is expected to be zero after a useful life of 5 years. The company could retain the existing equipment and use it for an additional 5 years if it doesn't purchase the new machine. At that time, the equipment's salvage value would be zero. If Blossom purchases the new machine now, it would have to scrap the existing machine. Blossom's accountant, Donna Clark, has accumulated the following data for annual sales and expenses, with and without the new machine: 1. 2. 3. Without the new machine, Blossom can sell 13,000 units of product annually at a per-unit selling price of $100. If it purchases the new machine, the number of units produced and sold would increase by 10%, and the selling price would remain the same. The new machine is faster than the old…

Crane Company purchases an oil tanker depot on January 1, 2020, at a cost of $639,700. Crane expects to operate the depot for 10 years, at which time it is legally required to dismantle the depot and remove the underground storage tanks. It is estimated that it will cost $69,980 to dismantle the depot and remove the tanks at the end of the depot's useful life. (a) Your answer is partially correct. Prepare the journal entries to record the depot and the asset retirement obligation for the depot on January 1, 2020. Based on an effective-interest rate of 6%, the present value required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) the asset retirement obligation on January 1, 2020, is $39,076. (If no entry is Date Account Titles and Explanation Debit Credit January 1, depot 2020 639700 Cash 639700 (To record the depot) January 1, 2020 depot 39076 Asset Retirement…

On January 1, 2021 the Hogan Manufacturing Company purchased a machine for $250,000. The company expects the service life of the machine to be 5 years and its anticipated residual value to be $40,000. The company's financial year end is December 31 and the straight line method is used for all depreciable assets. Jan 1, 2023, the company revised its estimate of service life from 5 to 8 years and also revised its estimated residual value to be $22,000. Required: Calculate depreciation for 2023