Question
5. Answer the following questions concerning the choice of depreciation method for an asset that has a 10-year life. Enter the number corresponding to your
5.
Answer the following questions concerning the choice of depreciation method for an asset that has a 10-year life. Enter the number corresponding to your answer in the box provided. Answer choices may be used once, more than once, or not at all.Be careful with matching questions because carmen randomizes the matches. Thus, if you print out the quiz to work on it and then enter your answers later in the week, it is very likely the order of the matches will be different. Therefore, exercise caution when entering your answers into carmen. Quiz scores will not be adjusted for errors in entering choices.
Question 5 options:
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8.
Mason Company purchased a new machine on January 1, 1999, for $64,000. At the time of acquisition, the machine was estimated to have a service life of eight years and a residual value of $10,000. The company uses the double-declining balance method of calculating depreciation. The machine was sold for $39,000 cash on December 31, 2001.
Calculate the amount of the gain recorded on the sale. Enter your answer as a number (i.e., 5,000). Do not use decimals, put a minus sign in front of your answer, or type the word gain after your answer.
9.
XYZ Company purchased a new machine on January 1, 2011 and assigned it an 8-year life with a residual value(note the amount of the residual value is intentionally omitted from the problem). Using the straight-linedepreciation method, the book value of the machine at December 31, 2013 was $47,250. Had XYZ Company useddouble-declining balance depreciation, the depreciation expense recorded on the machine in 2012 would havebeen $13,500.
Calculate the residual value assigned to the machine. Do not use decimals in your answer.
10.
On January 1, 2004, ABC Company purchased equipmentfor $98,000. The equipment was assigned a life of 12 years and a residual value of $14,000.
On January 1, 2009, ABC Company decided the life of the equipment should be revised from 12 to 15 years.
On January 1, 2014, ABC Company spent $50,000 to completely overhaul the equipment. This overhaul caused ABC Company to change the life of the equipment from 15 years to 19 years with a residual value at the end of the 19 years of $3,000.
Calculate thebook valueofthe equipmentatDecember 31, 2015assuming ABC Company employs thestraight linedepreciation method. Do not use decimals in your answer.
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