Revision of DepreciationEquipment with a cost of $354,500 has an estimated residual value of $38,000, has an estimated useful life of 15 years, and is depreciatedby the straight-line method.a. Determine the amount of the annual depreciation.21,100 Vb. Determine the book value after 10 full years of use.c. Assuming that at the start of the year 11 the remaíning life is estimated to be 8 years and the residual value is estimated to be $38,700,determine the depreciation expense for each of the remaining 8 years.FeedbackCheck My ViorkStraight-line depreciation allocates the depreciable cost of the asset equally over the expected useful life.The book value is the foxed asset cost less accumulated depreciation.Revising depreciation is necessary when estimates of residual values and/or useful lives of foced assets change due to abnormal wear and tear orobsolescence

Depreciation can be defined as a non-cash expenditure that is charged against the value of a fixed…

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Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 13PA: Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value...

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A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years. Prepare depreciation schedules reporting the depreciation expense, accumulated depreciation, and book value of the machine for each year under the double-declining-balance and sum-of-the-years-digits methods. For the double-declining-balance method, round the depreciation rate to two decimal places.
IMPACT OF IMPROVEMENTS AND REPLACEMENTS ON THE CALCULATION OF DEPRECIATION On January 1, 20-1, Dans Demolition purchased two jackhammers for 2,500 each with a salvage value of 100 each and estimated useful lives of four years. On January 1, 20-2, a stronger blade to improve performance was installed in Jackhammer A for 800 cash and the compressor was replaced in Jackhammer B for 200 cash. The compressor is expected to extend the life of Jackhammer B one year beyond the original estimate. REQUIRED 1. Using the straight-line method, prepare general journal entries for depreciation on December 31, 20-1, for Jackhammers A and B. 2. Enter the transactions for January 20-2 in a general journal. 3. Assuming no other additions, improvements, or replacements, calculate the depreciation expense for each jackhammer for 20-2 through 20-4.
Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assets life, and create the journal entry for year five.
MODIFIED ACCELERATED COST RECOVERY SYSTEM Using the information given in Exercise 5Apx-1B and the rates shown in Figure 5A-4, prepare a depreciation schedule showing the depreciation expense, accumulated depreciation, and book value for each year under the Modified Accelerated Cost Recovery System. For tax purposes, assume that the computer has a useful life of five years. (The IRS schedule will spread depreciation over six years.)
Revision of Depreciation Equipment with a cost of $240,000 has an estimated residual value of $18,600, has an estimated useful life of 12 years, and is depreciated by the straight-line method. a. Determine the amount of the annual depreciation. Determine the book value at the end of the tenth year of use. C Assuming that at the start of the eleventh year the remaining life is estimated to be four years and the residual value is estimated to be $4,800, determine the depreciation expense for each of the remaining four years.
Revision of Depreciation Equipment with a cost of $687,600 has an estimated residual value of $68,100, has an estimated useful life of 35 years, and is depreciated by the straight-line method. a. Determine the amount of the annual depreciation. b. Determine the book value after 18 full years of use. c. Assuming that at the start of the year 19 the remaining life is estimated to be 21 years and the residual value is estimated to be $56,100, determine the depreciation expense for each of the remaining 21 years.
Revision of depreciation Equipment with a cost of $354,400 has an estimated residual value of $40,800, has an estimated useful life of 32 years, and is depreciated by the straight-line method. a. Determine the amount of the annual depreciation. 9,800 ✔ b. Determine the book value after 18 full years of use. $ 178,000 ✓ c. Assuming that at the start of the year 19 the remaining life is estimated to be 18 years and the residual value is estimated to be $34,000, determine the depreciation expense for each of the remaining 18 years.
Revision of depreciation Equipment with a cost of $930,600 has an estimated residual value of $84,600, has an estimated useful life of 30 years, and is depreciated by the straight-line method. a. Determine the amount of the annual depreciation. $ 28,200 b. Determine the book value after 18 full years of use. $423,000 ✓ c. Assuming that at the start of the year 19 the remaining life is estimated to be 19 years and the residual value is estimated to be $82,900, determine the depreciation expense for each of the remaining 19 years. 17,895 X

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