FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- Copy equipment was acquired at the beginning of the year at a cost of $51,850 that has an estimated residual value of $4,700 and an estimated useful life of 5 years. It is estimated that the machine will output an estimated 943,000 copies. This year, 204,000 copies were made. a. Determine the depreciable cost.$fill in the blank 1 b. Determine the depreciation rate. Round your answer to two decimal places.$fill in the blank 2 per copy c. Determine the units-of-output depreciation for the year.$fill in the blank 3arrow_forwardWhite Mountain Supply Company purchases warehouse shelving for $18,500. Shipping charges were $370, and assembly and setup amounted to $575. The shelves are expected to last for 9 years and have a scrap value of $700. Use the straight-line method of depreciation to answer the questions. (Round your answers to the nearest cent.) (a) What is the annual depreciation expense (in $) of the shelving? (b) What is the accumulated depreciation (in $) after the third year? (c) What is the book value of the shelving (in $) after the fifth year?arrow_forwardNew lithographic equipment, acquired at a cost of $905,600 on March 1 at the beginning of a fiscal year, has an estimated useful life of five years and an estimated residual value of $101,880. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining-balance method was selected. In the first week of the fifth year, on March 4, the equipment was sold for $149,286. Required: 1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by (a) the straight-line method and (b) the double-declining-balance method. Round your answers to the nearest whole dollar. 2. Journalize the entry to record the sale assuming the manager chose the double-declining-balance method. Refer to the Chart of Accounts for…arrow_forward
- Equipment acquired at a cost of $96,000 has an estimated residual value of $6,000 and an estimated useful life of 10 years. It was placed in service on May 1 of the current fiscal year, which ends on December 31. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet a. Determine the depreciation for the current fiscal year and for the following fiscal year by the straight-line method. Round your answers to the nearest dollar. Depreciation Year 1 S Year 2 $ b. Determine the depreciation for the current fiscal year and for the following fiscal year by the double-declining-balance method. Do not round the double-declining balance rate. Round your answers to the nearest dollar. Depreciation Year 1 S Year 2 Sarrow_forwardXYZ Corporation has purchased a new piece of machinery for $75,000. The piece of equipment should last for 8 years and will have a $5,000 salvage value at the end of its useful life. They plan on using the unit-of-production depreciation method. Use the production information below to calculate the estimated depreciation information for each year. Year Units Produced 1 8,000 2 10,000 3 12,000 4 14,000 5 12,000 6 10,000 7 8,000 8 5,000arrow_forwardOn August 3, Cinco Construction purchased special-purpose equipment at a cost of $9,900,000. The useful life of the equipment was estimated to be eight years, with an estimated residual value of $20,000. a. Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the straight-line depreciation method (half-year convention). b. Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the 200 percent declining-balance method (half-year convention) with a switch to straight-line when it will maximize depreciation expense. c. Which of these two depreciation methods (straight-line or double-declining-balance) results in the highest net income for financial reporting purposes during the first two years of the equipment’s use?arrow_forward
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