Lindy Weink, the new controller of Oriole Company, has reviewed the expected useful lives and residual values of selected depreciable assets at December 31, 2024. (Depreciation for 2024 has not been recorded yet.) Her findings are as follows: Type of Asset Building Equipment Date Acquired Jan 1, 2009 Jan 1, 2022 Cost $800,500 125,410 Total Useful Life in Years Current Proposed 20 30 Residual Value Current $39,900 4,940 Proposed $60,160 3,980 After discussion, management agrees to accept Lindy's proposed changes. All assets are depreciated by the straight-line method. Oriole Company has a December 31 year end.
Lindy Weink, the new controller of Oriole Company, has reviewed the expected useful lives and residual values of selected depreciable assets at December 31, 2024. (Depreciation for 2024 has not been recorded yet.) Her findings are as follows: Type of Asset Building Equipment Date Acquired Jan 1, 2009 Jan 1, 2022 Cost $800,500 125,410 Total Useful Life in Years Current Proposed 20 30 Residual Value Current $39,900 4,940 Proposed $60,160 3,980 After discussion, management agrees to accept Lindy's proposed changes. All assets are depreciated by the straight-line method. Oriole Company has a December 31 year end.
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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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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