Equipment was acquired at the beginning of the year at a cost of $76,080. The equipment was depreciated using the straight line method based upon an estimated useful life of 6 years and an estimated residual value of $7,500. Required a. What was the depreciation expense for the first year? 11430 b. Assuming the equipment was sold at the end of the second year for $57.500. determine the gain or loss on the sale of the equipment. c. Joumalice Accounting numeric field junt box does not require an entry leave it blank
Equipment was acquired at the beginning of the year at a cost of $76,080. The equipment was depreciated using the straight line method based upon an estimated useful life of 6 years and an estimated residual value of $7,500. Required a. What was the depreciation expense for the first year? 11430 b. Assuming the equipment was sold at the end of the second year for $57.500. determine the gain or loss on the sale of the equipment. c. Joumalice Accounting numeric field junt box does not require an entry leave it blank
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 3RE: Albany Corporation purchased equipment at the beginning of Year 1 for 75,000. The asset does not...
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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2.
Transcribed Image Text:An asset was purchased for $121,000 on January 1, Year 1, and originally estimated to have a useful life of 9 years with a residual value of $5,000. At the beginning of the third year it was determined that the
remaining useful life of the asset was only 4 years with a residual value of $2.400. Compute the third-year depreciation expense using the revised amounts and straight-line method.
Oa 12137221
Ob. 12437211
On 12237232
Od. 12237232
Transcribed Image Text:Equipment was acquired at the beginning of the year at a cost of $76,080. The equipment was depreciated using the straight line method based upon an estimated useful life of 6 years and an estimated residual value
of $7,500.
Required
a. What was the depreciation expense for the first year?
11430
b. Assuming the equipment was sold at the end of the second year for $57.500. determine the gain or loss on the sale of the equipment.
c. Joumalice Accounting numeric field junt box does not require an entry leave it blank
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