The company acquired a machine on January 1 at an original cost of $80,000. The machines estimated
Question:
(1) Compute the annual straight-line depreciation amount,
(2) Make the journal entry necessary to record depreciation expense for the first year, and
(3) Compute the machine’s book value at the end of the first year.
Step by Step Answer:
1 80000 100004 years 17500 annu...View the full answer
Intermediate Accounting
ISBN: 978-0324312140
16th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
Related Video
In accounting terms, depreciation is defined as the reduction of the recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. An example of fixed assets are buildings, furniture, office equipment, machinery, etc. The land is the only exception that cannot be depreciated as the value of land appreciates with time. Depreciation allows a portion of the cost of a fixed asset to be the revenue generated by the fixed asset. This is mandatory under the matching principle as revenues are recorded with their associated expenses in the accounting period when the asset is in use. This helps in getting a complete picture of the revenue
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