Q3. A company acquired a new machine on April 2016 cost: $55000 with $5000 salvage value with an estimated useful life of 5 years. For tax purposes this machinery classified as a 5-years property. Instructions: a) Compute the depreciation under three methods for the first three years (2016, 2017 and 2018) by using half year convention for 2016 in each method. 2: Double-Declining-balance, b) Comments on significant difference and similarities for different purposes. 1: Straight line, 3: MACRS Q4. Assume and list down some liabilities increased/decreased transactions of your own

Q3. A company acquired a new machine on April 2016 cost: $55000 with $5000 salvage value with an estimated useful life of 5 years. For tax purposes this machinery classified as a 5-years property. Instructions: a) Compute the depreciation under three methods for the first three years (2016, 2017 and 2018) by using half year convention for 2016 in each method. 2: Double-Declining-balance, b) Comments on significant difference and similarities for different purposes. 1: Straight line, 3: MACRS Q4. Assume and list down some liabilities increased/decreased transactions of your own

Name: Q3.A company acquired a new machine on April 2016 cost: $55000 with $
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Description: Q3.A company acquired a new machine on April 2016 cost: $55000 with $5000 salvagevalue with an estimated useful life of 5 years. For tax purposes this machinery classifiedas a 5-years property.Instructions:a) Compute the depreciation under three met

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 8MC: On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was...

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Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000
When 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.
On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.
Albany Corporation purchased equipment at the beginning of Year 1 for 75,000. The asset does not have a residual value and is estimated to be in service for 8 years. Calculate the depreciation expense for Years 1 and 2 using the double-declining-balance method. Round to the nearest dollar.
Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.
Which of the following is not true about the MACRS depreciation system: A salvage value must be determined before depreciation percentages are applied to depreciable real estate. Residential rental buildings are depreciated over 27.5 years straight-line. Commercial real estate buildings are depreciated over 39 years straight-line. No matter when during the month depreciable real estate is purchased, it is considered to have been placed in service at mid-month for MACRS depreciation purposes.
Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.
Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used for deliveries, has the following characteristics: Estimated life: 5 years Estimated residual value: 3,000 Depreciation method for financial statements: straight-line method Depreciation for income tax purposes: MACRS (3-year life) From 2019 through 2023, each year, Hunter had sales of 100,000, cost of goods sold of 60,000, and operating expenses (excluding depreciation) of 15,000. The truck was disposed of on December 31, 2023, for 2,000. Required: 1. Prepare an income statement for financial reporting through pretax accounting income for each of the 5 years, 2019 through 2023. 2. Prepare, instead, an income statement for income tax purposes through taxable income for each of the 5 years, 2019 through 2023. 3. Compare the total income for all 5 years under Requirements 1 and 2.
A company acquired a new machine on April 2016 cost: $55000 with $5000 salvage value with an estimated useful life of 5 years. For tax purposes this machinery classified as a 5-years property. Instructions: Compute the depreciation under three methods for the first three years (2016, 2017 and 2018) by using half year convention for 2016 in each method. 1: Straight line, 2: Double-Declining-balance, 3: MACRS Comments on significant difference and similarities for different purposes.
A company acquired a new machine on April 2016 cost: $55000 with $5000 salvage value with an estimated useful life of 5 years. For tax purposes this machinery classified as a 5-years property. Compute the depreciation under three methods for the first three years (2016, 2017 and 2018) by using half year convention for 2016 in each method. 1.Straight line, 2. Double-Declining-balance, 3. MACRS Comments on significant difference and similarities for different purposes.
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. Required: - a- Show the journal entry to record depreciation expense at the end of the year 2016, and 2017 using i- Straight-line method ii- Unis-of-production method iii- Double declining balance method. b- Show the presentation of the asset in the balance sheet for the year ended on Dec 31st, 2016, and 2017 using i- Straight-line method ii- Unis-of-production method iii- Double declining balance method.
P9-3B) Depreciation Methods On January 2 Javier Company purchased an electroplating machine to help manufacture a part for one of its key products. The machine cost $437,400 and was estimated to have a useful life of six years or 781,200 platings, after which it could be sold for $46,800. Required: a) Calculate each year's depreciation expense for the period under each of the following depreciation methods: Straight-line. Double-declining balance. Units-of-production. (Assume annual production in platings of 140,000; 180,000; 150,000; 125,000; 95,000; and 91,200.) b) Assume that the machine was purchased on September 1. Calculate each year's depreciation expense for the period under each of the following depreciation methods: Straight-line. Double-declining balance.