Changing DepreciationKam 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-balancemethod of depreciation is used.Required:(If required, round to the nearest dollar.)1. Compute the depreciation expense for each year of the asset's life and book value at the end of each year.DepreciationBookExpensevalue2019 $5,000 V $15,000 V2020 $3,750 V $11,250 V2021 $2,813 V $8,438 X2,109 V $6,328 V2022 $2023 $1,582 V $4,746 V1,187 V $3,560 x2024 $2025 $890 V $2,670 X2026 $2,370 x $300 V2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the asset's life, compute the depreciation expense for each year ofthe asset's life. Compute the depreciation using the double-declining-balance through year four, then switch to the straight-line method. 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 asset's life.2019: $5,0002020: $3,7502021: $2,813 V2022: $2,110 X2023: $2,110| х2024: $2,110 X2025: $2,110 X2026: $2,110 X

Name: Changing DepreciationKam Company purchased a machine on January 2, 20
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Description: Changing DepreciationKam 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-balancemethod of depreciation is used.Required:(If required, round t

The question is based on the concept of Depreciation Accounting. Depreciation is the reduction in…

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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 anda residual value of $300. The double-declining-balance method of depreciation is used. Required: (If required, round to the nearest dollar.) 1. Compute the depreciation expense for each year of the asset's life and book value at the end of each year. Depreciation Book Expense value 2019 $ 5,000 V $ 15,000 V 2020 $ 3,750 V $ 11,250 V 2021 $ 2,813 V s 8,438 X 2022 $ 2,109 V $ 6,328 V 1,582 V $ 4,746 V 2023 $ 2024 $ 1,187 V $ 3,560 X 2025 $ 890 Y $ 2.670 x

Kam Company purchased a machine on January 2, 2019, for $20,000. The machine had an expected life of 8 years anda residual value of $300. The double-declining-balance method of depreciation is used. Required: (If required, round to the nearest dollar.) 1. Compute the depreciation expense for each year of the asset's life and book value at the end of each year. Depreciation Book Expense value 2019 $ 5,000 V $ 15,000 V 2020 $ 3,750 V $ 11,250 V 2021 $ 2,813 V s 8,438 X 2022 $ 2,109 V $ 6,328 V 1,582 V $ 4,746 V 2023 $ 2024 $ 1,187 V $ 3,560 X 2025 $ 890 Y $ 2.670 x

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 8P: Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of...

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