FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Related questions
Concept explainers
Topic Video
Question
Buddy Inc., a calendar year-end company, purchased a machine on 1/1/X1 with the following attributes:
| Cost | $ 80,000 |
| Salvage Value | $ 10,000 |
| Useful life | 4 years |
Assuming that Buddy uses the
Question #1: How much depreciation expense should be recorded in 20X3 (the third year of the asset's life)? Answer: $Answer.
Question #2: What should be the balance in the "
Question #3: What should be the book value of the machine at the end of 20X3, after all year-end journal entries? Answer: $Answer
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- How do I solve 2,3 and 4arrow_forwardSplish Company purchases equipment on January 1, Year 1, at a cost of $612,000. The asset is expected to have a service life of 12 years and a salvage value of $55,080. (a) Compute the amount of depreciation for each of Years 1 through 3 using the straight-line depreciation method. (Round answers to O decimal places, e.g. 5,125.) Your answer is correct. Depreciation for Year 2 (b) Depreciation for Year 1 Depreciation for Year 3 (c) eTextbook and Media Depreciation for Year 1 Your answer is correct. Depreciation for Year 2 Depreciation for Year 3 $ eTextbook and Media $ $ Compute the amount of depreciation for each of Years 1 through 3 using the sum-of-the-years-digits method. Depreciation for Year 2 $ $ $ Depreciation for Year 1 $ 46,410 $ 46,410 Depreciation for Year 3 $ 46,410 85.680 78.540 Compute the amount of depreciation for each of Years 1 through 3 using the double-declining-balance method. (Round depreciation rate to 2 decimal places, e.g. 15.84% and final answers to 0 decimal…arrow_forwardAssume that an asset costing $72,000 is expected to produce 500,000 units and have a salvage value of $6,000. The first year, 90,000 units are produced; the second year, 82,000 units are produced; the third year, 94,000 units are produced. Using the units-of-production method, complete the following: Year DepreciationExpense BookValue 0 — $72,000 1 fill in the blank 1 fill in the blank 2 2 fill in the blank 3 fill in the blank 4 3 fill in the blank 5arrow_forward
- Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] On April 1, Cyclone Company purchases a trencher for $304,000. The machine is expected to last five years and have a salvage value of $52,000. xercise 8-11 (Algo) Straight-line, partial-year depreciation LO C2 Compute depreciation expense at December 31 for both the first year and second year assuming the company uses the straight-line method. Choose Numerator: Year First year Second year Annual Depreciation 1 1 X Choose Denominator: Fraction of Year ▶II 0 F8 F9 F10 F11arrow_forwardRequired information Use the following information for the Exercises below. (The following information applies to the questions displayed below.] On April 1, Cyclone's Co. purchases a trencher for $302,000. The machine is expected to last five years and have a salvage value of $51,000. Exercise 8-12 Double-declining-balance, partlal-year depreciation LO C2 Compute depreciation expense at December 31 for both the first year and second year assuming the company uses the double- declining-balance method. (Enter all amounts as positive values.) Depreciation for the Period End of Period Beginning of Annual Period Period Book Value Depreciation Rate Partial Year Depreciation Expense Accumulated Depreciation Book Value Year 1 Year 2arrow_forwardOn January 1, Year 1, Friedman Company purchased a truck that cost $40,000. The truck had an expected useful life of 200,000 miles over 8 years and an $8,000 salvage value. During Year 2, Friedman drove the truck 19,000 miles. Friedman uses the units-of-production method. What is depreciation expense in Year 2? Note: Round your intermediate calculations to 3 decimal places. Multiple Choice O O O O $3,800 $3,040 $5,000 $4,000arrow_forward
- A machine was purchased for $72,000, has a 10-year useful life, and a $4,000 salvage value. What is its depreciation expense in year 2 using the sum of the years' digits method (rounded to the nearest dollar)? Select one: O a. 12,364 O b. 11,782 c. 13,091 d. 11,127 Oarrow_forwardpeavey enterprises purchased a depreciable asset for 29,000 on April 1, year 1. The asset will be depreciated using the Straight-line method over it four year useful life. assuming the assets salvage value is 3,400 what will be the amount of accumulated depreciation on this asset on Dec 31, year 3?arrow_forwardByrd Inc., a calendar year-end company, purchased a machine on 1/1/X1 with the following attributes: Cost $ 50,000 Salvage Value $ 2,000 Useful life 4 years Assuming that Byrd uses the straight-line depreciation method, answer each of the following questions: (do not include decimals or cents) Question #1: How much depreciation expense should be recorded in 20X2 (the second year of the asset's life)? Answer: $ Question #2: What should be the balance in the "Accumulated Depřeciation" account at the end of 20X2, after all year-end journal entries? Answer: $ Question #3: What should be the book value of the machine at the end of 20X2, after all year-end journal entries? Answer: $arrow_forward
- Billings Corporation purchased a wood pulp mixer for $17,344. Delivery costs totaled $464. The useful is 7 years, and the salvage value is $1,260. Prepare a depreciation schedule using the sum-of-the-years' digits method. Year Total Depreciation ($) x Depreciation Rate Fraction 1 2 3 4 5 6 7 Need Help? $ $ $ $ $ $ $ Read It X X X X X X X Watch It Billings Corporation SYD Depreciation Schedule-Wood Pulp Mixer Master It 7/28 6/28 5/28 4/28 3/28 2/28 1/28 = || || Annual Depreciation ($) Accumulated Depreciation ($) $ $ $ $ $ $ $ $ $ $ $ $ $ $ Book Value ($) $17,808 (new) $ $ $ $ $ $ $arrow_forwardMillar, Inc., purchased a truck to use for deliveries and is attempting to determine how much depreciation expense would be recognized under three different methods. The truck cost 24,000 and is expected to have a value of 4,000 at the end of its five-year life. Instructions a. Determine the amount of depreciation expense by preparing the depreciation schedule for the entire useful life of the asset under the following depreciation methods. 1. Straight-line. 2. Declining balance. 3. Double-declining-balance. b. Prepare the plant assets section of the balance sheet at the end of the second year of the asset's useful life under the straight line and double-declining-balance method, assuming the truck is the only plant asset owned by Millar, Inc.arrow_forward10. DEPLORABLE BAD Co. acquired a machine on October 5, 20x1 for a total cost of $160,000. The machine was estimated to have a useful life of 4 years and a salvage value of $10,000. DEPLORABLE BAD Co. uses the sum-of-the-years' digits method and prorates full-year depreciation to the nearest month. DEPLORABLE BAD Co. sold the machine on December 27, 20x2 for $40,000. How much is the gain (loss) on the sale? a. (48,750) b. 48,750 c. (32,250) d. 32,250arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education