Answered: Equipment was purchased for RM157,000…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter18: Accounting For Long-term Assets

Section: Chapter Questions

Problem 10SPA: IMPACT OF IMPROVEMENTS AND REPLACEMENTS ON THE CALCULATION OF DEPRECIATION On January 1, 20-1, two...

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1. Equipment was purchased for RM157,000 and there was a cost of RM20,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a RM30,000 salvage value at the end of its 5-year useful life. Depreciation expense each year using the straight-line method will be a. RM24,600 b. RM35,400 c. RM29,400 d. RM24,000 2. A lorry was purchased for RM120,000 and it was estimated to have a RM24,000 salvage value at the end of its useful life. Monthly depreciation expense of RM2,000 was recorded using the straight-line method. The annual depreciation rate is a. 20% b. 25% c. 8% d. 2% 3. Depreciation expense of an asset remains the same over its useful life when calculated using straight line method. TRUE/FALSE

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

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