FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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A machine which cost $400,000 is acquired on August 1, 2020. Its estimated salvage
value is $30,000 and its expected life is 8 years.
Instructions
Calculate depreciation expense for 2020 and 2021 by each of the following
methods, showing the figures used.
(a) Double-declining balance
(b) Sum-of-the-years'-digits
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- A company purchased equipment for $70,000 on January 1, 2022. The equipmtment is expected to have a five-year service life, with a residiual value of $15,000 at the end of five years. Using the straight line method, depreciation expense for 2023 and the book value at December 31, 2023 would be: $______ and $__________arrow_forwardStraight-Line, Declining-Balance, Sum-Of-The-Years'-Digits, and MACRS Methods A machine is purchased January 1 at a cost of $59,000. It is expected to serve for eight years and have a salvage value of $3,000. Required: 1. Prepare a schedule showing depreciation for each year and the book value at the end of each year using the following methods a. Straight-linearrow_forwardAn equipment costing P220,000 has an estimated life of 14 years with a book value of P30,000 at the end of the period. Compute the depreciation charge and its book value after 10 years using: a. straight-line method b. sinking fund method c. declining balance method d. sum of year's digit methodarrow_forward
- Compute the declining-balance depreciation schedule for an asset with thefollowing data:arrow_forwardThe following transactions occurred during 2025. Assume that depreciation of 10% per year is charged on all machinery and 5% per year on buildings, on a straight-line basis, with no estimated salvage value. Depreciation is charged for a full year on all fixed assets acquired during the year, and no depreciation is charged on fixed assets disposed of during the year. Jan. 30 Mar. 10 Mar. 20 May 18 June 23 A building that cost $139,920 in 2008 is torn down to make room for a new building. The wrecking contractor was paid $5,406 and was permitted to keep all materials salvaged. Date Machinery that was purchased in 2018 for $16,960 is sold for $3,074 cash, f.o.b. purchaser's plant. Freight of $318 is paid on the sale of this machinery. A gear breaks on a machine that cost $9,540 in 2017. The gear is replaced at a cost of $2,120. The replacement does not extend the useful life of the machine but does make the machine more efficient. A special base installed for a machine in 2019 when the…arrow_forwardSwifty Company purchased a new plant asset on April 1, 2025, at a cost of $720,000. It was estimated to have a service life of 20 years and a salvage value of $56,400. Swifty accounting period is the calendar year. (a) 4 Compute the depreciation for this asset for 2025 and 2026 using the sum-of-the-years'-digits method. (Do not round intermediate calculations. Round final answers to 0 decimal places, e.g. 45,892.) Depreciation for 2025 Depreciation for 2026 IA $ $arrow_forward
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