Answered: A machine with a cost of $50,000 has an…

A machine with a cost of $50,000 has an estimated residual value of $5,000 and an estimated useful life of 10 years. What is the amount of annual depreciation computed by the straight-line method?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 3EA: Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is...

See similar textbooks

Related questions

Q: An asset costing $20,000 has estimated useful life of 5 years and salvage value of $4,500. Calculate…

A: >Accounting principle states that the cost of the long term assets (like equipment) is to be…

Q: A machine, purchased for$50,000, has a depreciable life of five years. It will have an expected…

Q: The initial cost of a machine is 30000 TL, its depreciation life is 7 years and its scrap value is…

A: Depreciation describes the decrease in the value of the asset on a systematic basis on yearly basis.…

Q: A piece of machinery costs $7000 and has an anticipated $1200 salvage value at the end of its…

A: Depreciation is the allocation of cost of asset over the useful life of the asset, because fixed…

Q: Concord Corporation constructed a building at a cost of $13650000. Weighted-average accumulated…

A: depreciation expense under SLM method = (Cost incurred +avoidable interest cost - salvage value) /…

Q: A machine costs Php 500,000 with a salvage value of Php 50,000. Its useful life is six years. The…

A: Depreciation is the decrease in the value of fixed tangible asset due to usage, obsolence or passage…

Q: A machine with a cost of $474000 has an estimated salvage value of $24000 and an estimated useful…

Q: A machine with a cost of $60,631.00 has an estimated residual value of $4,924.00 and an estimated…

A: Please Note: Since you have asked multiple questions, we will solve the first question for you. If…

Q: A machine with a cost of $67,600.00 has an estimated residual value of $3,188.00 and an estimated…

A: Double-declining balance method (Accelerated method): In this method of depreciation, the…

Q: A piece of machinery costs 35,000$ and has an anticipated 7,000$ scrap value at the end of its…

A: Depreciation can be defined as fall in the asset’s historical value each year. Depreciable amount is…

Q: ABC Company has an equipment costing P 700,000 with an estimated residual value of P 70,000 and an…

A: Depreciation The purpose of calculating the depreciation cost of the assets to determine the actual…

Q: A machine was purchased at an amount of 8 million dinars for the construction works, noting that the…

A: Straight-Line depreciation method : = (Value of the asset - Salvage value) / No of useful life…

Q: A machine with a cost of $63,210.00 has an estimated residual value of $4,731.00 and an estimated…

A: Unit of Output method Unit of production depreciation, also called as activity method, calculates…

Q: An equipment costing P250,000 has an estimated life of 15 years with a book value of P30,000 at the…

A: The question is based on the concept of Depreciation Accounting.

Q: A machine costing P 733,615 is estimated to have a life of 10 years. If the annual rate of…

A: Under Constant percentage of declining balance method, to calculate depreciation for current year,…

Q: A machine with a cost of $67,400 has an estimated residual value of $4,408 and an estimated life of…

A: Double Declining balance method is a form of an accelerated depreciation method in which the asset…

Q: A machine with a cost of $560,000 has an estimated salvage value of $8)0,000 and an estimated useful…

A: Given data, Asset cost =$560,000 Salvage value =$80,000 Useful life =40,000 hours The machine was…

Q: JIG Company has an equipment costing $1,000,000 with an estimated residual value of $100,000 and an…

A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…

Q: If a dump truck for hauling coal has an estimated net cost of $90,000 and is expected to give…

A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due…

Q: Equipment with a cost of $950000 has an estimated salvage value of $30000 and an estimated life of 4…

A: Depreciation: It refers to a gradual decrease in the fixed asset’s value because of obsolescence,…

Q: depreciation in year 3

A: units of production depreciation method : it is the one of the method for calculation of…

Q: A player computer has a cost of $3,850 with a residual of $800 and an estimated useful life of 5…

A: Solution: Annual depreciation using SLM = (Cost - Salvage value) / useful life = ($3,850 - $800) / 5…

Q: A refrigerator used by a meat processor has a cost of $75,940, an estimated residual value of…

A: Depreciation: It is the reduction in the value of an asset over the normal course of usage like wear…

Q: The cost of an asset is RO 50,000 and has an estimated use value of 20,000 hours. During the first…

A: Depreciable base=Cost of an asset-Salvage value=RO 50,000-RO 4,000=RO 46,000

Q: A refrigerator used by a wholesale warehouse has a cost of $66,700, an estimated residual value of…

A: Solution: Annual depreciation = (Cost - residual value)/ useful life

Q: A machine cost RO 50,000 and its estimated salvage value is RO 5000 and its expected life is eight…

A: Given Cost = RO 50,000 Salvage Value = RO 5000

Q: The initial cost of the machine including its installation is 930,000. The expected life of the…

A: Declining Balance Method: It is an accelerated depreciation system to record larger depreciation…

Q: depreciation charge and its book value after 10 years using straight-line method

A: Annual depreciation = (Cost of the fixed asset - Salvage value)/Useful life

Q: A refrigerator used by a wholesale warehouse has a cost of $66,700, an estimated resid-ual value of…

Q: Equipment with a cost of $662000 has an estimated salvage value of $50000 and an estimated life of 4…

A: Depreciation is the method of allocating the cost of a asset over its useful life. Depreciation…

Q: A truck with a cost of $82,000 has an estimated residual value of $16,000, has an estimated useful…

A: Requirement A:Determine the amount of annual depreciation:

Q: A truck for hauling coal has an estimated net cost of $85,000 and is expected to give service for…

A: Depreciation as per usage method is charged based on the number of miles, the vehicles has been run…

Q: A machine with a cost of $59,600 has an estimated residual value of $3,072 and an estimated life of…

A: In the double declining method of depreciation, the expenses of an asset are considered to be double…

Q: A building with a cost of $900,000 has an estimated residual value of $360,000, has an estimated…

A: a. Annual Depreciation (straight line method) = (Cost of the assets - Residual value) / Expected…

Q: A truck with a cost of $123,000 has an estimated residual value of $24,000, has an estimated useful…

A: Hello. Since your question has multiple parts, we will solve first question for you. If you want…

Q: A refrigerator used by a wholesale warehouse has a cost of $64,000, an estimated residual value of…

A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…

Q: A machine with a cost of $75,000 has an estimated residual value of $5000 and an estimated life…

A: Depreciation using Double Declining Balance Method Double Declining Balance Depreciation Rate = 2 x…

Q: The cost of a machine is RO 18000 with a salvage value of RO 3000 at the end of its six years of…

A: Annual Depreciation (straight line method) = (Cost of the assets - Residual value) / Expected life…

Q: A machine with a cost of $58,300.00 has an estimated residual value of $4,902.00 and an estimated…

A: Depreciation expense = Book Value at beginning of year x Double declining balance method rate(DDB…

Q: A machine with a cost of $120,000 has an estimated residual value of $15,000 and an estimated life…

A: Hey, since there are multiple requirements posted, we will answer the first three requirements. If…

Q: Equipment with a cost of $180,000 has an estimated residual value of $14,400, has an estimated…

A: Straight-line method - It is a method in which the same depreciation is charged year after year from…

Q: Equipment with a cost of $450,000 has an estimated salvage value of $30,000 and an estimated life of…

A: The depreciation is a decline in the value of tangible assets over their useful life. it is a…

Q: ABC Company has an equipment costing P 700,000 with an estimated residual value of P 70,000 and an…

A: If the upgrading costs improved the current condition of asset and provide extra benefit in future…

Q: A machine with a cost of $76,828.00 has an estimated residual value of $5,216.00 and an estimated…

A: Units-of-production method: The depreciation method which assumes that the consumption of economic…

Q: A machine was purchased for $68,000. It has a useful life of 5 years and a residual value of $8,000.…

A: Annual depreciation (Straightline) = (Original cost - Residual value) / Useful life

Question

A machine with a cost of $50,000 has an estimated residual value of $5,000 and an

estimated useful life of 10 years.

What is the amount of annual depreciation computed by the straight-line method?

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

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

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.
Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000 hours, the company expects to sell the asset for 150,000. What is the depreciation rate per hour based on activity?
Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for 120,000 miles. Montello uses the units-of-production depreciation method and in year one it expects to use the truck for 23,000 miles. Calculate the annual depreciation expense.
To test your formulas, assume the machine purchased had an estimated useful life of three years (20,000, 30,000, and 50,000 hours, respectively). Enter the new information in the Data Section of the worksheet. Does your depreciation total 320,000 under all three methods? There are three common errors made by students completing this worksheet. Lets clear up two of them. One, an asset that has a three-year life should have no depreciation claimed in Year 4. This can be corrected using an =IF statement in Year 4. For example, the correct formula in cell C32 is =IF(B32D9,0,(D7D8)/D9) or =IF(B32D9, 0, SLN(D7, D8, D9)). You may wish to edit what you have already entered rather than retype it. Two, as mentioned in requirement 2, the double-declining-balance calculation needs to be modified in the last year of the assets life. Assuming you have already modified the formula for Year 4 (per instructions in step 2), alter the formula for Year 3 also. If you corrected any formulas, test their correctness by trying different estimated useful lives (between 3 and 8) in cell E9. Then reset the Data Section to the original values, save the revised file as DEPREC2, and reprint the worksheet to show the correct formulas. The third common error doesnt need to be corrected in this problem. The general form of the double-declining-balance formula needs to be modified to check the net book value of the asset each year to make sure it does not go below salvage value. =DDB does this automatically, but if you are writing your own formulas, this gets very complicated and is beyond the scope of the problem.
Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for ten years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.
Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.
Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an estimated useful life of four years or 100,000 hours, and a salvage value of 30,000. This machine will be used 30,000 hours during Year 1, 20,000 hours in Year 2, 40,000 hours in Year 3, and 10,000 hours in Year 4. With DEPREC5 still on the screen, click the Chart sheet tab. This chart shows the accumulated depreciation under all three depreciation methods. Identify below the depreciation method that each represents. Series 1 _____________________ Series 2 _____________________ Series 3 _____________________ When the assignment is complete, close the file without saving it again. Worksheet. The problem thus far has assumed that assets are depreciated a full year in the year acquired. Normally, depreciation begins in the month acquired. For example, an asset acquired at the beginning of April is depreciated for only nine months in the year of acquisition. Modify the DEPREC2 worksheet to include the month of acquisition as an additional item of input. To demonstrate proper handling of this factor on the depreciation schedule, modify the formulas for the first two years. Some of the formulas may not actually need to be revised. Do not modify the formulas for Years 3 through 8 and ignore the numbers shown in those years. Some will be incorrect as will be some of the totals. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Save the completed file as DEPRECT. Hint: Insert the month in row 6 of the Data Section specifying the month by a number (e.g., April is the fourth month of the year). Redo the formulas for Years 1 and 2. For the units of production method, assume no change in the estimated hours for both years. Chart. Using the DEPREC5 file, prepare a line chart or XY chart that plots annual depreciation expense under all three depreciation methods. No Chart Data Table is needed; use the range B29 to E36 on the worksheet as a basis for preparing the chart if you prepare an XY chart. Use C29 to E36 if you prepare a line chart. Enter your name somewhere on the chart. Save the file again as DEPREC5. Print the chart.
Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.