PE 10-4A Revision of depreciation OBJ. 2 Equipment with a cost of $304,000 has an estimated residual value of $41,600, has an estimated useful life of 16 years, and is depreciated by the straight-line method. (a) Determine the amount of the annual depreciation. (b) Determine the book value at the end of the tenth year of use. (c) Assuming that at the start of the eleventh year the remaining life is estimated to be eight years and the residual value is estimated to be $16,800, determine the depreciation expense for each of the remaining eight years.
PE 10-4A Revision of depreciation OBJ. 2 Equipment with a cost of $304,000 has an estimated residual value of $41,600, has an estimated useful life of 16 years, and is depreciated by the straight-line method. (a) Determine the amount of the annual depreciation. (b) Determine the book value at the end of the tenth year of use. (c) Assuming that at the start of the eleventh year the remaining life is estimated to be eight years and the residual value is estimated to be $16,800, determine the depreciation expense for each of the remaining eight years.
Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter9: Long-term Assets: Fixed And Intangible
Section: Chapter Questions
Problem 9.4BE: Revision of depreciation Equipment with a cost of 180,000 has an estimated residual value of 14,400,...
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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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Transcribed Image Text:PE 10-4A Revision of depreciation
OBJ. 2
Equipment with a cost of $304,000 has an estimated residual value of $41,600, has
an estimated useful life of 16 years, and is depreciated by the straight-line method.
(a) Determine the amount of the annual depreciation. (b) Determine the book value at
the end of the tenth year of use. (c) Assuming that at the start of the eleventh year the
remaining life is estimated to be eight years and the residual value is estimated to be
$16,800, determine the depreciation expense for each of the remaining eight years.
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