Cox Inc. acquired a machine for $410,000 on January 1, Year 1. The machine has a salvage value of $10,000 and a 5-year useful life. Cox expects the machine to run for 10,000 machine hours. The machine was actually used for 1,700 hours in 2019 and 2,000 hours in 2020. What would be the balance in the accumulated depreciation account at the end of the second year, if the straight-line method were used? a.$148,000 b.$160,000 c.$250,000 d.$80,000

Cox Inc. acquired a machine for $410,000 on January 1, Year 1. The machine has a salvage value of $10,000 and a 5-year useful life. Cox expects the machine to run for 10,000 machine hours. The machine was actually used for 1,700 hours in 2019 and 2,000 hours in 2020. What would be the balance in the accumulated depreciation account at the end of the second year, if the straight-line method were used? a.$148,000 b.$160,000 c.$250,000 d.$80,000

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 4RE: Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000...

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Kam 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.
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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.
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