Monster Inc. purchased a machine for $100,000 and depreciated it on a straight-line basis over a 10-year period. The machine has an estimated residual value of $10,000. After using the asset for 3 years, the management realized that the machine will wear out before 10 years. Starting in year 4, the company began depreciating the machine over a revised total life of 8 years. a. Calculate the depreciation expense for year 1 b. Calculate the book value of the machine after year 3 c. Calculate the depreciation expense for year 4 d. Calculate the book value of the machine after year 8

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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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	Monster Inc. purchased a machine for $100,000 and depreciated it on a straight-line basis over a
	10-year period. The machine has an estimated residual value of $10,000. After using the asset
	for 3 years, the management realized that the machine will wear out before 10 years. Starting in
	year 4, the company began depreciating the machine over a revised total life of 8 years.

	a. Calculate the depreciation expense for year 1

	b. Calculate the book value of the machine after year 3

	c. Calculate the depreciation expense for year 4

	d. Calculate the book value of the machine after year 8

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