On January 2, 2021, Twilight Hospital purchased a $104,400 special radiology scanner from Sheridan Inc. The scanner had a useful life of 4 years and was estimated to have no disposal value at the end of its useful life. The straight-line method of depreciation is used on this scanner. Annual operating costs with this scanner are $106,000. Approximately one year later, the hospital is approached by Dyno Technology salesperson, Jacob Cullen, who indicated that purchasing the scanner in 2021 from Sheridan Inc. was a mistake. He points out that Dyno has a scanner that will save Twilight Hospital $25,000 a year in operating expenses over its 3-year useful life. Jacob notes that the new scanner will cost $110,000 and has the same capabilities as the scanner purchased last year. The hospital agrees that both scanners are of equal quality. The new scanner will have no disposal value. Jacob agrees to buy the old scanner from Twilight Hospital for $55,500. (a) If Twilight Hospital sells its old scanner on January 2, 2022, compute the gain or loss on the sale.

ProWasher’s lawyer, Anna Turney, informed you that ProWasher has a legal obligation to dismantle and remove the equipment used to produce the dishwashers and clean up the rental premises as part of the lease agreement. The equipment, costing $10 million, was put into production on June 1, 2023 and has a useful life of 120 months.  The dismantling and removal costs are estimated to be $3 million. What is the accountant supposed to do?

A civil engineer who owns his own design/build/operate company purchased a small crane 3 years ago at a cost of $65,000. At that time, it was expected to be used for 10 years and then traded in for its salvage value of $10,000. Due to increased construction activities, the company would prefer to trade for a new, larger crane now, which will cost $80,000. The company estimates that the old crane can be used, if necessary, for another 3 years, at which time it would have a $17,000 estimated market value. Its current market value is estimated to be $29,000, and if it is used for another 3 years, it will have M&O costs (exclusive of operator costs) of $17,000 per year. Determine the values of P, n, S, and AOC that should be used for the existing crane in a replacement analysis.   The value of P is $  . The value of n is  years. The value of S is $  . The AOC value is $  per year.

On January 1, 2024, reliable delivery service purchased a truck at a cost of $65,000. Before placing the truck in service, reliable spent $2500 painting it $2500 replacing tires, and $9500 over hauling the engine the truck should remain in service for five years and have a residual value of $6000. the trucks annual mileage is expected to be 23,000 miles in each of the first four years and 13,000 miles in the fifth year – 105,000 miles in total. And deciding which depreciation method to use Harold Parker, the general manager, requesting depreciation schedule for each of the depreciation methods.( straight line units of production and double declining balance.) prepare the schedules. 

On January 2, 2021, Oriole Hospital purchased a $94,800 special radiology scanner from Bella Inc. The scanner had a useful life of 4 years and was estimated to have no disposal value at the end of its useful life. The straight-line method of depreciation is used on this scanner. Annual operating costs with this scanner are $106,000. Approximately one year later, the hospital is approached by Dyno Technology salesperson, Jacob Cullen, who indicated that purchasing the scanner in 2021 from Bella Inc. was a mistake. He points out that Dyno has a scanner that will save Oriole Hospital $26,000 a year in operating expenses over its 3-year useful life. Jacob notes that the new scanner will cost $111,000 and has the same capabilities as the scanner purchased last year. The hospital agrees that both scanners are of equal quality. The new scanner will have no disposal value. Jacob agrees to buy the old scanner from Oriole Hospital for $40,500. (a) If Oriole Hospital sells its old scanner on…

During 2024, Nash constructed a small manufacturing facility specifically to manufacture one particular accessory. Nash paid the construction contractor $5,279,000 cash (which was the total contract price) and placed the facility into service on January 1, 2025. Because of technological change, Nash anticipates that the manufacturing facility will be useful for no more than 10 years. The local government where the facility is located required that, at the end of the 10-year period, Nash remediate the facility so that it can be used as a community center. Nash estimates the cost of remediation will be $632,900. Nash uses straight-line depreciation with $0 salvage value for its plant asset and a 12% discount rate for asset retirement obligations. (a) Your answer is correct. Prepare the journal entries to record the January 1, 2025, transactions. Use the Plant Assets account for the tanker depot. (Credit account titles are automatically indented when the amount is entered. Do not indent…

Wildhorse's Auto Care is considering the purchase of a new tow truck. The garage doesn't currently have a tow truck, and the $59,950 price tag for a new truck would represent a major expenditure. Wildhorse Austen, owner of the garage, has compiled the following estimates in trying to determine whether the tow truck should be purchased. Initial cost $59,950 Estimated useful life 8 years Net annual cash flows from towing $7,990 Overhaul costs (end of year 4) $5,970 Salvage value $12,000 Show Transcribed Text د Wildhorse's good friend, Rick Ryan, stopped by. He is trying to convince Wildhorse that the tow truck will have other benefits that Wildhorse hasn't even considered. First, he says, cars that need towing need to be fixed. Thus, when Wildhorse tows them to her facility, her repair revenues will increase. Second, he notes that the tow truck could have a plow mounted on it, thus saving Wildhorse the cost of plowing her parking lot. (Rick will give her a used plow blade for free if…

On January 3, 2020, Gagne Inc. paid $320,000 for a computer system. In addition to the basic purchase price, the company paid a setup fee of $2,500, $6,400 sales tax, and $21,100 for special installation. Management estimates that the computer will remain in service for five years and have a residual value of $20,000. The computer will process 50,000 documents the first year, decreasing annually by 5,000 during each of the next four years (that is 45,000 documents in 2021, 40,000 documents is 2022, and so on). In trying to decide which depreciation method to use, the company president has requested a depreciation schedule for each of three depreciation methods (straight-line, units-of-production, and double-diminishing-balance). Before completing the straight-line depreciation schedule, calculate the straight-line depreciation rate. First, select the labels for the formula and then compute the rate. (Round the rate to two decimal places.) Date January 3, 2020 December 31, 2020 December…

Jarrod has a small business where he produces ping pong balls. He has an opportunity to update his production process with a piece of equipment that costs $46,000 on June 10, 2023. A new trimming machine for when the ball is being formed. The equipment is expected to have a 12-year service life. The trimming machine also has an estimated residual value of $9,000. Determine for the year 2022 the depreciation expense for each of the methods listed. 1.Straight line 2. Sum-of-the-years'-digits 3. Double-declining balance

A homeowner remodeled their kitchen in November 2018. The remodel project included purchasing a high-end residential grade dishwasher with a 10 year useful life expectancy that cost $10,000. The current replacement cost of the dishwasher is $15,000. Breaking news: Last night a fire destroyed the dishwasher. If the homeowner maintains Property coverage on an actual cash value (ACV) basis, how much would they recover from their insurer for the dishwasher? $5,000 $10,000 O $7,500 O $15,000