Question
The following question is on the amortization of capital assets. a. A piece of machinery was purchased for $10,000 on January 1, 2016. The machinery
The following question is on the amortization of capital assets.
a. A piece of machinery was purchased for $10,000 on January 1, 2016. The machinery is expected to have a useful life of 5 years and no salvage value at the end of the fifth year. Assuming straight line amortization, calculate the monthly amortization for the month of January 2016.
b. Prepare the journal entry for the amortization of the machinery for the month of January 2016.
c. Calculate the net book value of the machinery as of December 31, 2018.
d. If the machinery was being amortized on a declining balance method with a rate of 30% what would be the total amount to amortize in the first year 2016?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
a To calculate the monthly amortization for the month of January 2016 we need to divide the cost of ...
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Step: 2
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Intermediate Accounting
Authors: Earl K. Stice, James D. Stice
18th edition
538479736, 978-1111534783, 1111534780, 978-0538479738
