questions: assume that the fair value of each item at the end 3rd year was 130,000 for land 480,000 for building and 190,000 for machinery. prepar the requirement for 2nd year .

required for 3rd. year recalculate

Example: Component Depreciation On January 1, Year 1, an entity acquires a new piece of machinery with an estimated useful life of 10 years for $120,000. The machine has an electrical motor that must be replaced every five years and is estimated to cost $10,000 to replace. In addition, by law the machine must be inspected every two years; the inspection cost is $2,000. The company has determined that the straight-line method of depreciation best reflects the pattern in which the asset's future benefits will be consumed. Assuming no residual value, depreciation of $13,800 on this machinery in Year 1 is determined in the following manner. Depreciation 13800 Accumulated Depreciation 13800 Example: Component Depreciation On January 1, Year 1, an entity acquires a new piece of machinery with an estimated useful life of 10 years for $120,000. The machine has an electrical motor that must be replaced every five years and is estimated to cost $10,000 to replace. In addition, by law the machine must be inspected every two years; the inspection cost is $2,000. The company has determined that the straight-line method of depreciation best reflects the pattern in which the asset's future benefits will be consumed. Assuming no residual value, depreciation of $13,800 on this machinery in Year 1 is determined in the following manner. Depreciation 13800 Accumulated Depreciation 13800