On January 1, 2008, the company purchased equipment for $600,000. The equipment has a 20-year expected useful
Question:
On January 1, 2008, the company purchased equipment for $600,000. The equipment has a 20-year expected useful life and $0 residual value. Initially, the company used double-declining-balance depreciation. On January 1, 2011, the company changed to straight-line depreciation. The expected useful life and residual value are unchanged. Compute depreciation expense for 2011. Ignore income taxes.
Step by Step Answer:
Doubledecliningbalance percentage 10020 years 2 10 Depreciation Accumulated Book Year Computati...View the full answer
Intermediate Accounting
ISBN: 978-0324592375
17th 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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