Stockton Corporation purchased a new computer system on January 1, 2017, for $300,000 cash. The company also

Question:

Stockton Corporation purchased a new computer system on January 1, 2017, for $300,000 cash. The company also incurred $25,000 in installation costs and $10,000 to train its employees on the new system. The computer system has an estimated useful life of five years and an estimated salvage value of $70,000.
a. Prepare the entry to record the acquisition of the computer system.
b. Calculate the depreciation expense recognized each year over the life of the system for each of the following assumptions:
(1) Stockton uses straight-line depreciation.
(2) Stockton uses double-declining-balance depreciation.
c. Provide the journal entry recorded by Stockton at the end of 2017 under the double-declining-balance method.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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