Revision of depreciation Equipment with a cost of $930,600 has an estimated residual value of $84,600, has an estimated useful life of 30 years, and is depreciated by the straight-line method. a. Determine the amount of the annual depreciation. 28,200 ✓ b. Determine the book value after 18 full years of use. 423,000 ✓ c. Assuming that at the start of the year 19 the remaining life is estimated to be 19 years and the residual value is estimated to be $82,900, determine the depreciation expense for each of the remaining 19 years. 17,895 X
Revision of depreciation Equipment with a cost of $930,600 has an estimated residual value of $84,600, has an estimated useful life of 30 years, and is depreciated by the straight-line method. a. Determine the amount of the annual depreciation. 28,200 ✓ b. Determine the book value after 18 full years of use. 423,000 ✓ c. Assuming that at the start of the year 19 the remaining life is estimated to be 19 years and the residual value is estimated to be $82,900, determine the depreciation expense for each of the remaining 19 years. 17,895 X
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 3CE: A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years....
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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:Revision of depreciation
Equipment with a cost of $930,600 has an estimated residual value of $84,600, has an estimated useful life of
30 years, and is depreciated by the straight-line method.
a. Determine the amount of the annual depreciation.
$ 28,200
b. Determine the book value after 18 full years of use.
$423,000 ✓
c. Assuming that at the start of the year 19 the remaining life is estimated to be 19 years and the residual value
is estimated to be $82,900, determine the depreciation expense for each of the remaining 19 years.
17,895 X
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