Flint Solar Energy showed the following information in its Property, Plant, and Equipment subledger regarding a machine.
Question:
Flint Solar Energy showed the following information in its Property, Plant, and Equipment subledger regarding a machine.
On September 1, 2020, the motor was replaced with a new one costing $60,000; it was purchased on account. The new motor had an estimated residual value of $10,000 and an estimated life of eight years. Calculate the total depreciation expense to be recorded on the machine for 2020.
Machine: Accum. Dep. at Dec. 31, 2019, Year-End Depreciation Date of Purchase Jan. 1/16 Jan. 1/16 Jan. 1/16 Est. Residual Est. Life Component Cost Method Straight-line Straight-line Straight-line 10 years Motor Metal housing Misc. parts $ 45,000 $ 5,000 15,000 $16,000 8,480 12,000 $36,480 25 years 5 years 68,000 15,000 $128,000 -0-
Step by Step Answer:
Motor old 45000 5000 40000 10yrs 812 2667 Motor ...View the full answer
Fundamental Accounting Principles Volume I
ISBN: 978-1260305821
16th Canadian edition
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann
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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