Randy Automotive purchased equipment on October 1, 2021, at a total cost of $150,000. The machine has an estimated useful life of 8 years or 100,000 hours, and an estimated residual value of $10,000. During 2021 and 2022, the machinery was used 4,400 and 12,800 hours, respectively. Instructions Compute depreciation expense at December 31, 2021 and December 31, 2022, under the following depreciation methods: Straight-line depreciation Units-of-production depreciation Double diminishing-balance depreciation 20212022

Randy Automotive purchased equipment on October 1, 2021, at a total cost of $150,000. The machine has an estimated useful life of 8 years or 100,000 hours, and an estimated residual value of $10,000. During 2021 and 2022, the machinery was used 4,400 and 12,800 hours, respectively. Instructions Compute depreciation expense at December 31, 2021 and December 31, 2022, under the following depreciation methods: Straight-line depreciation Units-of-production depreciation Double diminishing-balance depreciation 20212022

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Description: Don't give solution in image format.. Randy Automotive purchased equipment on October 1, 2021, at a total cost of $150,000. The machine hasan estimated useful life of 8 years or 100,000 hours, and an estimated residual value of $10,000. During2021 an

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 2RE: Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual...

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On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.
Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000
Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.
On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was estimated at 2,000. The equipment will be depreciated over 10 years using the double-declining balance method. Counting the year of acquisition as one-half year, Mundo should record 2019 depredation expense of: a. 7,680 b. 9,000 c. 9,600 d. 10,000
Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.
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