Using Financial Accounting Information
10th Edition
ISBN: 9781337276337
Author: Porter, Gary A.
Publisher: Cengage Learning,
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 4, Problem 4.8.4E
To determine
Depreciation:
The depreciation can be defined as the reduction in the value of the asset over the passage of the time and wear and tear of the asset due to its usage.
To Identify and analyze:
The adjustment to record depreciation at the end of July 2017
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Calculating partial-year depreciation
On February 28, 2017, Rural Tech Support purchased a copy machine for $53,400. Rural Tech Support expects the machine to last for six years and have a residual value of $3,000. Compute depreciation expense on the machine for the year ended December 31, 2017, using the straight-line method.
Depreciation Methods
On September 1, 2015, Alvarez Company purchased an electroplating machine to help manufacture a part for one of its key products. The machine cost $260,700 and was estimated to have a useful life of six years or 700,000 cuttings, after which it could be sold for $26,400.
Required
a. Calculate each year’s depreciation expense for the period 2015-2020 under each of the following depreciation methods (round all answers to the nearest dollar):1. Straight-line.2. Double-declining balance.3. Units-of-production. (Assume annual production in platings of 140,000; 180,000; 100,000; 110,000; 80,000; and 90,000.)
1. Straight-Line
Year
DepreciationExpense
2015
2016
2017
2018
2019
2020
2. Double-declining balance
Year
DepreciationExpense
2015
2016
2017
2018
2019
2020
3. Units of Production
Year
DepreciationExpense
2015
2016
2017
2018
2019
2020
b. Assume that the machine…
Depreciation Methods
On January 2, 2015, Alvarez Company purchased an electroplating machine to help manufacture a part for one of its key products. The machine cost $260,700 and was estimated to have a useful life of six years or 700,000 cuttings, after which it could be sold for $26,400.
Required
a. Calculate each year’s depreciation expense for the period 2015-2020 under each of the following depreciation methods (round all answers to the nearest dollar):1. Straight-line.2. Double-declining balance.3. Units-of-production. (Assume annual production in platings of 140,000; 180,000; 100,000; 110,000; 80,000; and 90,000.)
Chapter 4 Solutions
Using Financial Accounting Information
Ch. 4 - Revenue Recognition The highway department...Ch. 4 - Prob. 4.2.1ECh. 4 - Prob. 4.2.2ECh. 4 - Prob. 4.2.3ECh. 4 - Prob. 4.3ECh. 4 - Prob. 4.4ECh. 4 - Prob. 4.5ECh. 4 - Prob. 4.6.1ECh. 4 - Prob. 4.6.2ECh. 4 - Prob. 4.6.3E
Ch. 4 - Prob. 4.6.4ECh. 4 - Prob. 4.7.1ECh. 4 - Prob. 4.7.2ECh. 4 - Prob. 4.8.1ECh. 4 - Prob. 4.8.2ECh. 4 - Prob. 4.8.3ECh. 4 - Prob. 4.8.4ECh. 4 - Prob. 4.8.5ECh. 4 - Prob. 4.9.1ECh. 4 - Working Backward: Depreciation Polk Corp....Ch. 4 - Prob. 4.10.1ECh. 4 - Prob. 4.10.2ECh. 4 - Prob. 4.10.3ECh. 4 - Prob. 4.10.4ECh. 4 - Prob. 4.11.1ECh. 4 - Prob. 4.11.2ECh. 4 - Prob. 4.11.3ECh. 4 - Prob. 4.12.1ECh. 4 - Prob. 4.12.2ECh. 4 - Prob. 4.12.3ECh. 4 - Prob. 4.13.1ECh. 4 - Prob. 4.13.2ECh. 4 - Prob. 4.13.3ECh. 4 - Prob. 4.14ECh. 4 - Prob. 4.15.1ECh. 4 - Prob. 4.15.2ECh. 4 - Prob. 4.15.3ECh. 4 - Prob. 4.15.4ECh. 4 - Prob. 4.15.5ECh. 4 - Prob. 4.16.1ECh. 4 - Prob. 4.16.2ECh. 4 - Prob. 4.16.3ECh. 4 - Prob. 4.17.1ECh. 4 - Prob. 4.17.2ECh. 4 - Prob. 4.18.1ECh. 4 - Prob. 4.18.2ECh. 4 - Prob. 4.18.3ECh. 4 - Prob. 4.19.1ECh. 4 - Prob. 4.19.2ECh. 4 - Prob. 4.20.1ECh. 4 - Prob. 4.20.2ECh. 4 - Prob. 4.20.3ECh. 4 - Prob. 4.21.1ECh. 4 - Prob. 4.21.2ECh. 4 - Prob. 4.22ECh. 4 - The Effect of Ignoring Adjustments on Net Income...Ch. 4 - Prob. 4.24ECh. 4 - Prob. 4.25ECh. 4 - Prob. 4.26.1MCECh. 4 - Prob. 4.26.2MCECh. 4 - Depreciation Expense During 2017, Carter Company...Ch. 4 - Depreciation Expense During 2017, Carter Company...Ch. 4 - Prob. 4.28.1MCECh. 4 - Prob. 4.28.2MCECh. 4 - Prob. 4.1.1PCh. 4 - Prob. 4.1.2PCh. 4 - Prob. 4.2.1PCh. 4 - Prob. 4.2.2PCh. 4 - Prob. 4.3PCh. 4 - Prob. 4.4.1PCh. 4 - Prob. 4.4.2PCh. 4 - Prob. 4.5.1PCh. 4 - Prob. 4.5.2PCh. 4 - Prob. 4.5.3PCh. 4 - Prob. 4.6.1PCh. 4 - Prob. 4.6.2PCh. 4 - Prob. 4.6.3PCh. 4 - Prob. 4.6.4PCh. 4 - Prob. 4.6.5PCh. 4 - Prob. 4.6.6PCh. 4 - Prob. 4.7.1PCh. 4 - Prob. 4.7.2PCh. 4 - Prob. 4.8MCPCh. 4 - Prob. 4.9.1MCPCh. 4 - Prob. 4.9.2MCPCh. 4 - Monthly Transactions, Adjustments, and Financial...Ch. 4 - Prob. 4.9.4MCPCh. 4 - Prob. 4.9.5MCPCh. 4 - Prob. 4.1.1AAPCh. 4 - Prob. 4.1.2AAPCh. 4 - Prob. 4.2.1AAPCh. 4 - Prob. 4.2.2AAPCh. 4 - Prob. 4.3AAPCh. 4 - Use of Account Balances as a Basis for Annual...Ch. 4 - Prob. 4.4.2AAPCh. 4 - Prob. 4.5.1AAPCh. 4 - Prob. 4.5.2AAPCh. 4 - Prob. 4.6.1AAPCh. 4 - Prob. 4.6.2AAPCh. 4 - Prob. 4.6.3AAPCh. 4 - Prob. 4.6.4AAPCh. 4 - Prob. 4.6.5AAPCh. 4 - Prob. 4.6.6AAPCh. 4 - Prob. 4.7.1AAPCh. 4 - Prob. 4.7.2AAPCh. 4 - Prob. 4.8AAMCPCh. 4 - Prob. 4.9.1AAMCPCh. 4 - Prob. 4.9.2AAMCPCh. 4 - Prob. 4.9.3AAMCPCh. 4 - Prob. 4.9.4AAMCP
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
- Depreciation On July 1, 2016, Dexter Corp. buys a computer system for $260,000 in cash. Assume that the computer is expected to have a four-year life and an estimated salvage value of $20,000 at the end of that time. Required Prepare the journal entry to record the purchase of the computer on July 1, 2016. Compute the depreciable cost of the computer. Using the straight-line method, compute the monthly depreciation. Prepare the adjusting entry to record depreciation at the end of July 2016. Compute the computers carrying value that will be shown on Dexters balance sheet prepared on December 31, 2016.arrow_forwardRevision of Depreciation On January 1, 2017, Blizzards-R-Us purchased a snow-blowing machine for $125,000. The machine was expected to have a residual value of $12,000 at the end of its 5-year useful life. On January 1, 2019, Blizzards-R-Us concluded that the machine would have a remaining useful life of 6 years with a residual value of $3,600. Required: 1. Determine the revised annual depreciation expense for 2019 using the straight-line method. 2. CONCEPTUAL CONNECTION How does the revision in depreciation affect the Blizzards-R-Us financial statements?arrow_forwardDepreciation Methods Sorter Company purchased equipment for 200,000 on January 2, 2019. The equipment has an estimated service life of 8 years and an estimated residual value of 20,000. Required: Compute the depreciation expense for 2019 under each of the following methods: 1. straight-line 2. sum-of-the-years-digits 3. double-declining-balance 4. Next Level What effect does the depreciation of the equipment have on the analysis of rate of return?arrow_forward
- Working Backward: Depreciation Polk Corp. purchased new store fixtures for $55,000 on January 31, 2014. Polk depreciates assets using the straight-line method and estimated a salvage value for the machine of $5,000. On its December 31, 2016, balance sheet, Polk reported the following: Required What is the yearly amount of depreciation expense for the store fixtures? What is the estimated useful life in years for the store fixtures? Explain your answer.arrow_forwardKam 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.arrow_forwardDepreciation Methods On January 2, 2015, Alvarez Company purchased an electroplating machine to help manufacture a part for one of its key products. The machine cost $260,700 and was estimated to have a useful life of six years or 700,000 cuttings, after which it could be sold for $26,400. Required a. Calculate each year’s depreciation expense for the period 2015-2020 under each of the following depreciation methods (round all answers to the nearest dollar):1. Straight-line.2. Double-declining balance.3. Units-of-production. (Assume annual production in platings of 140,000; 180,000; 100,000; 110,000; 80,000; and 90,000.) 1. Straight-Line Year DepreciationExpense 2015 2016 2017 2018 2019 2020 2. Double-declining balance Year DepreciationExpense 2015 2016 2017 2018 2019 2020arrow_forward
- Machinery purchased for $ 74,400 by Splish Co. in 2016 was originally estimated to have a life of 8 years with a salvage value of $ 4,960 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2021, it is determined that the total estimated life should be 10 years with a salvage value of $ 5,580 at the end of that time. Assume straight-line depreciation. Prepare the entry to correct the prior years' depreciation, if necessary. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Prepare the entry to record depreciation for 2021. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Use Machinery related account.)arrow_forwardMachinery purchased for $ 74,400 by Splish Co. in 2016 was originally estimated to have a life of 8 years with a salvage value of $ 4,960 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2021, it is determined that the total estimated life should be 10 years with a salvage value of $ 5,580 at the end of that time. Assume straight-line depreciation. Prepare the entry to correct the prior years' depreciation, if necessary. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)arrow_forwardDepreciation calculation methods Millco, Inc., acquired a machine that cost $1,200,000 early in 2016. The machine is expected to last for eight years, and its estimated salvage value at the end of its life is $180,000. Required: a. Using straight-line depreciation, calculate the depreciation expense to be recognized in the first year of the machine's life and calculate the accumulated depreciation after the fifth year of the machine's life.arrow_forward
- Depreciating a fixed asset During 2018, Starbucks purchased fixed assets costing approximately $1.8 billion. Assume that the company purchased the assets at the beginning of the year, uses straight-line depreciation, and normally depreciates its equipment over four years. Assume a zero salvage value. Compute the book value of the equipment at the end of each of the four years. Complete a chart like the following. 2018 2019 2020 2021 Total Depreciation expense (in millions) Cash outflow associated with the purchase of the equipment (in millions) What is the purpose of the adjustments at the end of each period?arrow_forwardWan Company purchased a new machine on October 1, 2017, at a cost of $100,000. The company estimated that the machine has a salvage value of $4,000. The machine is expected to be used for 8-years. Instructions Compute the depreciationexpense under the straight-line method for 2017 and 2018, assuming a December 31 year-end (use comma in numbers, one thousand is 1,000, not 1000. NO decimal point, NO $ sign):arrow_forwardGordon Chemicals Company acquires a delivery truck at a cost of $25,000 on January 1, 2017. The truck is expected to have a salvage value of $4,000 at the end of its 3-year useful life. Compute annual depreciation for the first and second years using the straight-line method. (Round answers to 0 decimal places, e.g. 125.) First Year Second Year Annual depreciation under straight-line methodarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Accounting for Derivatives_1.mp4; Author: DVRamanaXIMB;https://www.youtube.com/watch?v=kZky1jIiCN0;License: Standard Youtube License
Depreciation|(Concept and Methods); Author: easyCBSE commerce lectures;https://www.youtube.com/watch?v=w4lScJke6CA;License: Standard YouTube License, CC-BY