Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Exercise 11-8 Oriole Corporation bought a machine on June 1, 2015, for $31,930, f.o.b. the place of manufacture. Freight to the point where it was

Exercise 11-8

Oriole Corporation bought a machine on June 1, 2015, for $31,930, f.o.b. the place of manufacture. Freight to the point where it was set up was $206, and $515 was expended to install it. The machines useful life was estimated at 10 years, with a salvage value of $2,575. On June 1, 2016, an essential part of the machine is replaced, at a cost of $2,039, with one designed to reduce the cost of operating the machine. The cost of the old part and related depreciation cannot be determined with any accuracy.

On June 1, 2019, the company buys a new machine of greater capacity for $36,050, delivered, trading in the old machine which has a fair value and trade-in allowance of $20,600. To prepare the old machine for removal from the plant cost $77, and expenditures to install the new one were $1,545. It is estimated that the new machine has a useful life of 10 years, with a salvage value of $4,120 at the end of that time. (The exchange has commercial substance.)

Assuming that depreciation is to be computed on the straight-line basis, compute the annual depreciation on the new equipment that should be provided for the fiscal year beginning June 1, 2019. (Round answer to 0 decimal places, e.g. 45,892.)

Depreciation for the year beginning June 1, 2019

$

IE

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The International Corporate Governance System Audit Roles And Board Oversight

Authors: F. Lessambo

1st Edition

134947178X, 978-1349471782

More Books

Students also viewed these Accounting questions