Required information [The following information applies to the questions displayed below] At the beginning of the year, Canary.com bought a shed, a machine, and a trailer. The shed initially cost $20,300 but had to be renovated at a cost of $540. The shed was expected to last 7 years, with a residual value of $1,450. Repairs costing $360 were incurred at the end of the first year of use. The machine cost $11,250, and is estimated to have a total life of 40,000 hours and residual value of $900. The machine was actually used 2.000 hours in year 1 and 4,000 hours in year 2. The trailer cost $11,300 and was expected to last 4 years, with a residual value of $2.000. Required: 1. Compute the amount to be capitalized for the shed. Total cost $
Required information [The following information applies to the questions displayed below] At the beginning of the year, Canary.com bought a shed, a machine, and a trailer. The shed initially cost $20,300 but had to be renovated at a cost of $540. The shed was expected to last 7 years, with a residual value of $1,450. Repairs costing $360 were incurred at the end of the first year of use. The machine cost $11,250, and is estimated to have a total life of 40,000 hours and residual value of $900. The machine was actually used 2.000 hours in year 1 and 4,000 hours in year 2. The trailer cost $11,300 and was expected to last 4 years, with a residual value of $2.000. Required: 1. Compute the amount to be capitalized for the shed. Total cost $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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![Required information.
[The following information applies to the questions displayed below.]
At the beginning of the year, Canary.com bought a shed, a machine, and a trailer.
The shed initially cost $20,300 but had to be renovated at a cost of $540. The shed was expected to last 7 years, with a
residual value of $1,450. Repairs costing $360 were incurred at the end of the first year of use.
The machine cost $11,250, and is estimated to have a total life of 40,000 hours and residual value of $900. The machine.
was actually used 2,000 hours in year 1 and 4.000 hours in year 2.
The trailer cost $11,300 and was expected to last 4 years, with a residual value of $2.000.
Required:
1. Compute the amount to be capitalized for the shed.
Total cost
$
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F02abe3f7-743e-40de-a685-73af034628f0%2F5d3b05c5-9b38-45ab-b11e-db51b83c9264%2Fhe63k0u_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information.
[The following information applies to the questions displayed below.]
At the beginning of the year, Canary.com bought a shed, a machine, and a trailer.
The shed initially cost $20,300 but had to be renovated at a cost of $540. The shed was expected to last 7 years, with a
residual value of $1,450. Repairs costing $360 were incurred at the end of the first year of use.
The machine cost $11,250, and is estimated to have a total life of 40,000 hours and residual value of $900. The machine.
was actually used 2,000 hours in year 1 and 4.000 hours in year 2.
The trailer cost $11,300 and was expected to last 4 years, with a residual value of $2.000.
Required:
1. Compute the amount to be capitalized for the shed.
Total cost
$
0
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