Pentice Company purchased a depreciable asset for $200,000 with an estimated salvage value of $20,000 and useful life of 10 years. Using the straight-line method, the depreciation base is $180,000, which is the cost ($200,000) minus the salvage value ($20,000).
Pentice Company purchased a depreciable asset for $200,000 with an estimated salvage value of $20,000 and useful life of 10 years. Using the straight-line method, the depreciation base is $180,000, which is the cost ($200,000) minus the salvage value ($20,000).
Pentice Company purchased a depreciable asset for $200,000 with an estimated salvage value of $20,000 and useful life of 10 years. Using the straight-line method, the depreciation base is $180,000, which is the cost ($200,000) minus the salvage value ($20,000).
Pentice Company purchased a depreciable asset for $200,000 with an estimated salvage value of $20,000 and useful life of 10 years. Using the straight-line method, the depreciation base is $180,000, which is the cost ($200,000) minus the salvage value ($20,000).
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.Pentice Company purchased a depreciable asset for $200,000.
The estimated salvage value is
$20,000, and the estimated useful life is 10 years. The straight-line method will be used for depreciation. What is the depreciation base of this asset? a. $18,000 b. $20,000 c. $180,000 d. $200,000
$200,000 – $20,000 = $180,000.
non Company purchased a depreciable asset for $200,000. The estimated salvage value is $10,000, and the estimated useful life is 10,000 hours. Lennon used the asset for 1,100 hours in the current year. The activity method will be used for depreciation. What is the depreciation expense on this asset? a. $19,000 b. $20,900 c. $22,000 d. $190,000
[$200,000 – $10,000) ÷ 10,000] × 1,100 = $20,900.
Starr Company purchased a depreciable asset for $150,000. The estimated salvage value is $10,000, and the estimated useful life is 8 years. The double-declining balance method will be used for depreciation. What is the depreciation expense for the second year on this asset? a. $17,500 b. $26,250 c. $28,125 d. $37,500
$150,000 × [(1 ÷ 8) × 2] = $37,500
($150,000 – $37,500) × [(1 ÷ 8) × 2] = $28,125.
Bigbie Company purchased a depreciable asset for $600,000. The estimated salvage value is $30,000, and the estimated useful life is 10,000 hours. Bigbie used the asset for 1,100 hours in the current year. The activity method will be used for depreciation. What is the depreciation expense on this asset? a. $57,000 b. $62,700 c. $66,000 d. $570,000
Pine Company purchased a depreciable asset for $360,000. The estimated salvage value is $24,000, and the estimated useful life is 8 years. The double-declining balance method will be used for depreciation. What is the depreciation expense for the second year on this asset? a. $42,000 b. $63,000 c. $67,500 d. $90,000
$360,000 × [(1 ÷ 8) × 2] = $90,000
($360,000 – $90,000) × [(1 ÷ 8) × 2] = $67,500.
On July 1, 2006, Rodriguez Corporation purchased factory equipment for $150,000. Salvage value was estimated to be $4,000. The equipment will be depreciated over ten years using the double-declining balance method. Counting the year of acquisition as one-half year, Gonzalez should record depreciation expense for 2007 on this equipment of a. $30,000. b. $27,000. c. $26,280. d. $24,000.
[$150,000 – ($150,000 × 0.1)] × 0.2 = $27,000.
Norris Corporation purchased factory equipment that was installed and put into serviceJanuary 2, 2006, at a total cost of $60,000. Salvage value was estimated at $4,000. The equipment is being depreciated over four years using the double-declining balance method. For the year 2007, Norris should record depreciation expense on this equipment of a. $14,000. b. $15,000. c. $28,000. d. $30,000.
[$60,000 × (1 – 0.5)] × 0.5 = $15,000.
On April 13, 2006, Foley Co. purchased machinery for $120,000. Salvage value was estimated to be $5,000. The machinery will be depreciated over ten years using the double-declining balance method. If depreciation is computed on the basis of the nearest full month, Foley should record depreciation expense for 2007 on this machinery of a. $20,800. b. $20,400. c. $20,550. d. $20,933.
Vinson Co. purchased machinery that was installed and ready for use on January 3, 2006, at a total cost of $69,000. Salvage value was estimated at $9,000. The machinery will be depreciated over five years using the double-declining balance method. For the year 2007, Vinson should record depreciation expense on this machinery of a. $14,400. b. $16,560. c. $18,000. d. $27,600.
[$69,000 – ($69,000 × 0.4)] × 0.4 = $16,560.
Depreciation, Impairments, and Depletion 11 - 3
A plant asset has a cost of $24,000 and a salvage value of $6,000. The asset has a three-year life. If depreciation in the third year amounted to $3,000, which depreciation method was used? a. Straight-line b. Declining-balance c. Sum-of-the-years'-digits d. Cannot tell from information given
($24,000 – $6,000) × 1/6 = $3,000.
On January 1, 2006, Carson Company purchased a new machine for $2,100,000. The new machine has an estimated useful life of nine years and the salvage value was estimated to be $75,000. Depreciation was computed on the sum-of-the-years'-digits method. What amount should be shown in Carson's balance sheet at December 31, 2007, net of accumulated depreciation, for this machine? a. $1,695,000 b. $1,335,000 c. $1,306,666 d. $1,244,250
