FINANCIAL ACCT-CONNECT
8th Edition
ISBN: 9781266627903
Author: Wild
Publisher: INTER MCG
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Depreciation calculation methods Millco, Inc., acquired a machine that cost $1,200,000 early in 2016. The
machine is expected to last for eight years, and its estimated salvage value at the end of its life is $180,000.
Required:
a. Using straight-line depreciation, calculate the depreciation expense to be recognized in the first year of the
machine's life and calculate the accumulated depreciation after the fifth year of the machine's life.
Calculate the depreciation expense in the year of 2014 by using Straight line method
Asif Company acquired machinery on January 1, 2014 with an amount AED84,000. The
useful life of the machinery is expected to be 4 years. The salvage value at the end of the
life of the machinery is expected to be AED4,000. The machinery can produce maximum
80,000 units during its useful life.
Recording Asset Acquisition, Depreciation, and Disposal
On January 2, 2016, Verdi Company acquired a machine for $75,000. In addition to the purchase price, Verdi spent $2,100 for shipping and installation, and $2,600 to
calibrate the machine prior to use. The company estimates that the machine has a useful life of 5 years and a residual value of $11,000.
Required
a. Prepare journal entries to record the acquisition costs.
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b. Calculate the annual depreciation expense using straight-line depreciation and prepare a journal entry to record depreciation expense for 2016.
Description
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Cash
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Accumulated depreciation
c. On December 31, 2019, Verdi sold the machine to another company for $14,000. Prepare the necessary journal entry to record the sale.
Credit
Description
Debit
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Debit
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Chapter 8 Solutions
FINANCIAL ACCT-CONNECT
Ch. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - Prob. 4DQCh. 8 - Prob. 5DQCh. 8 - Prob. 6DQCh. 8 - Prob. 7DQCh. 8 - Prob. 8DQCh. 8 - Identify events that might lead to disposal of a...Ch. 8 - Prob. 10DQ
Ch. 8 - Prob. 11DQCh. 8 - Prob. 12DQCh. 8 - Prob. 13DQCh. 8 - Prob. 14DQCh. 8 - Prob. 15DQCh. 8 - Prob. 16DQCh. 8 - Prob. 17DQCh. 8 - Prob. 18DQCh. 8 - Prob. 19DQCh. 8 - Prob. 20DQCh. 8 - Prob. 21DQCh. 8 - Prob. 1QSCh. 8 - Prob. 2QSCh. 8 - Straight-line depreciation P1 On January 2, 2016,...Ch. 8 - Prob. 4QSCh. 8 - Computing revised depreciation C2 On January 2,...Ch. 8 - Prob. 6QSCh. 8 - Prob. 7QSCh. 8 - Prob. 8QSCh. 8 - Prob. 9QSCh. 8 - Prob. 10QSCh. 8 - Identify the following assets a through i as...Ch. 8 - Prob. 12QSCh. 8 - Prob. 13QSCh. 8 - Caleb Co. owns a machine that costs $42,400 with...Ch. 8 - Prob. 15QSCh. 8 - Prob. 1ECh. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Prob. 4ECh. 8 - Prob. 5ECh. 8 - Prob. 6ECh. 8 - Prob. 7ECh. 8 - Prob. 8ECh. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 - Prob. 14ECh. 8 - Prob. 15ECh. 8 - Prob. 16ECh. 8 - Partial-year depreciation; disposal of plant asset...Ch. 8 - Prob. 18ECh. 8 - Prob. 19ECh. 8 - Prob. 20ECh. 8 - Prob. 21ECh. 8 - Prob. 22ECh. 8 - A Exchanging assets P5 Gilly Construction trades...Ch. 8 - Recording plant asset disposals P2 P5 On January...Ch. 8 - Prob. 25ECh. 8 - Plant asset costs; depreciation methods C1 P1...Ch. 8 - Prob. 2PSACh. 8 - Prob. 3PSACh. 8 - Prob. 4PSACh. 8 - Prob. 5PSACh. 8 - Onslow Co. purchases a used machine for $178,000...Ch. 8 - Prob. 7PSACh. 8 - Prob. 8PSACh. 8 - Prob. 1PSBCh. 8 - Prob. 2PSBCh. 8 - Asset cost allocation; straight-line depreciation...Ch. 8 - Computing and revising depreciation; revenue and...Ch. 8 - Computing and revising depreciation; selling plant...Ch. 8 - Prob. 6PSBCh. 8 - Prob. 7PSBCh. 8 - Prob. 8PSBCh. 8 - Prob. 8SPCh. 8 - Prob. 1BTNCh. 8 - Prob. 2BTNCh. 8 - Prob. 3BTNCh. 8 - Teams are to select an industry, and each team...Ch. 8 - Prob. 5BTNCh. 8 - Prob. 7BTNCh. 8 - Prob. 9BTN
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Working Backward: Depreciation Polk Corp. purchased new store fixtures for $55,000 on January 31, 2014. Polk depreciates assets using the straight-line method and estimated a salvage value for the machine of $5,000. On its December 31, 2016, balance sheet, Polk reported the following: Required What is the yearly amount of depreciation expense for the store fixtures? What is the estimated useful life in years for the store fixtures? Explain your answer.arrow_forwardWhen depreciation is recorded each period, what account is debited? a. Depreciation Expense b. Cash c. Accumulated Depreciation d. The fixed asset account involved Use the following information for Multiple-Choice Questions 7-4 through 7-6: Cox Inc. acquired a machine for on January 1, 2019. The machine has a salvage value of $20,000 and a 5-year useful life. Cox expects the machine to run for 15,000 machine hours. The machine was actually used for 4,200 hours in 2019 and 3,450 hours in 2020.arrow_forwardO 3Depreciation calculation methods Millco, Inc., acquired a machine that cost $1,200,000 early in 2016. The machine is expected to last for eight years, and its estimated salvage value at the end of its life is $180,000.Required:a. Using straight-line depreciation, calculate the depreciation expense to be recognized in the first year of the machine’s life and calculate the accumulated depreciation after the fifth year of the machine’s life.b. Using declining-balance depreciation at twice the straight-line rate, calculate the depreciation expense for the third year of the machine’s life.c. What will be the net book value of the machine at the end of its eighth year of use before it is disposed of, under each depreciation method?arrow_forward
- Depreciation calculation methods Gandolfi Construction Co. purchased a used CAT 336DL earth mover at a cost of $500,000 in January 2016. The company’s estimated useful life of this heavy equipment is 10 years, and the estimated salvage value is $100,000.Required:a. Using straight-line depreciation, calculate the depreciation expense to be recognized for 2016, the first year of the equipment’s life, and calculate the equipment’s net book value at December 31, 2018, after the third year of the equipment’s life.b. Using declining-balance depreciation at twice the straight-line rate, calculate the depreciation expense to be recognized for 2018, the third year of the equipment’s life.arrow_forwardSlotkin Products purchased a machine for $39,000 on July 1, 2014. The company intends to depreciate it over 8 years using the double-declining balance method. Salvage value is $3,000. Depreciation for 2015 to the closest dollar is A.$8,531 B.$19,500 C.$4,875 D. $7,500arrow_forwardDepreciation Methods On January 2, 2015, Alvarez Company purchased an electroplating machine to help manufacture a part for one of its key products. The machine cost $260,700 and was estimated to have a useful life of six years or 700,000 cuttings, after which it could be sold for $26,400. Required a. Calculate each year’s depreciation expense for the period 2015-2020 under each of the following depreciation methods (round all answers to the nearest dollar):1. Straight-line.2. Double-declining balance.3. Units-of-production. (Assume annual production in platings of 140,000; 180,000; 100,000; 110,000; 80,000; and 90,000.)arrow_forward
- Zorzi Corporation purchased a Machine on January 1. 2017 for $80,000 The machinery is estimated to have a salvage value of $8,000 after a useful life of 8 years. Compute the depreciation expense for 2017 using the sume of the years didgets method O $16.000 S25,000 O $30,000 $35,000arrow_forwardComputing Depreciation Expense. Equipment costing $440,000, with an expected scrap value of $40,000 and an estimated useful life of 5 years, was purchased on January 1, 20 Calculate the depreciation expense for years 2012 to 2016 using: (a) the straight-line method and (b) the double-declining-balance method. Round to the nearest whole number. 2012 2013 2014 2015 2016 Straight-line depreciation Double declining balance (0) without straight-line switch-over s (b) with straight-line switch-over 80,000 v$ 80,000 vS 80,000 vs 80,000 v S 80,000 176,000 vs 176,000 vs 105,600 S 63,360 vs 38,016 $ 17,024 105,600 vs 80,000 x $ 80,000 x s 80,000 x Which method is typically preferred for: A) income tax purposes? Double-dedining balance o thi financial reporting purposes? Straight-line methodarrow_forward
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