Identify which depreciation method, straight-line or diminishing-balance, would result in the greatest reduction in the carrying amount
Question:
Identify which depreciation method, straight-line or diminishing-balance, would result in the greatest reduction in the carrying amount of a piece of equipment in the year of its acquisition.
Step by Step Answer:
Diminishing balance would result in the greatest reduction i...View the full answer
Understanding Financial Accounting
ISBN: 9781119406921
2nd Canadian Edition
Authors: Christopher D. Burnley
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
Students also viewed these Business questions
-
Identify which depreciation method, straight-line or diminishing-balance would result in the higher net income in the year that a piece of equipment is purchased.
-
Marshalls Dry Cleaning purchased new equipment on January 1, 2010, at a cost of $125,000. The estimated useful life is eight years with a salvage value of $15,000. Requirements 1. Prepare two...
-
Piper Corporation purchased machinery on January 1, 2012, at a cost of $280,000. The machinery's estimated useful life is five years, with a residual value of $10,000. The company is considering...
-
For the given year, find the standard quotas for the New York City boroughs given in Table 17.5 in Problems 23-28. Assume there are eight council seats. Table 17. 5 1990 Year Total 1790 49 1800 81...
-
Set up an Euler's method spreadsheet for each of the following systems: (a) Example 5 (b) Example 6 (c) Example 9 Choose an initial condition that corresponds to Fig. 6. 1. l, 6.1.2, or 6. I. 7 as...
-
Will a standard TTL device work with an input level of 1.7 V?
-
Discuss qualitative risk analysis and explain how to calculate risk factors, create probability/impact matrixes, and apply the Top Ten Risk Item Tracking technique to rank risks? LO.1
-
Sweet Stores, Inc., sells electronics and appliances. The excerpts that follow are adapted from Sweet Stores' financial statements for 2016 and 2015? Requirements 1. How much was Sweet Stores' cost...
-
Imagine yourself as the senior Quantity Surveyor in construction project and discuss on how accounting help for Quantity Surveyors job role
-
The proton and 13C NMR spectra of a compound of formula C4H11N are shown here. Determine the structure of this amine, and give peak assignments for all of the protons in the structure. 200 180 160...
-
Explain what management is expecting if they depreciate their production equipment on a diminishing-balance basis at 5% per year.
-
Explain how the carrying amount of a piece of equipment is based on multiple estimates.
-
This activity is a superlative exercise for illustrating the highly complex and often intense dynamics between two groups when: 1. Both teams are striving to outperform the other 2. The temptation to...
-
Maria A Solo (SSN 318-01-6921) lives at 190 Glenn drive, grand rapids, Michigan 49527-2005. Maria (age 45 and single) claims her aunt, Selda Ray (ssn 282-61-4011), as a dependent. Selda lives with...
-
A clinical trial was conducted to test the effectiveness of a drug used for treating insomnia in older subjects. After treatment with the drug, 11 subjects had a mean wake time of 95.1 min and a...
-
PROBLEM 13-3 Translation-Local Currency Is the Functional Currency LO7 (This problem is a continuation of the illustration presented in the chapter.) On January 2, 2019, P Company, a US-based...
-
The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary...
-
Claim: Fewer than 8.2% of homes have only a landline telephone and no wireless phone. Sample data: A survey by the National Center for Health Statistics showed that among 13,215 homes 5.78% had...
-
Using the coffee demand function, Q = 8.56 - p - 0.3p s + 0.1Y, show that sugar is a complement for coffee. You can use a numerical example, algebra, or calculus.
-
In a nonmagnetic medium, E = 50 cos (10 9 t 8x) a y + 40 sin (10 9 t 8x) a z V/m find the dielectric constant r and the corresponding H.
-
Canada Canning Company owns processing equipment that had an initial cost of $106,000, expected useful life of eight years, and expected residual value of $10,000. Depreciation calculations are done...
-
At the end of 2016, Spindle Works Inc. owned a piece of equipment that had originally cost $21,000. It was being depreciated by the straight-line method, and had $8,500 of accumulated depreciation...
-
Jijang Excavations Ltd. (JEL) operates specialized equipment for installing natural gas pipelines. JEL, which has a December 31 year end, began 2016 with a single piece of equipment that had been...
-
Los siguientes datos corresponden a las operaciones de Turk Company el ao pasado: Ventas $ 900 000 Utilidad operativa neta $ 36 000 Margen de contribucin $ 150 000 Activos operativos promedio $ 180...
-
Problem 16-16 Tax Shields (LO2) River Cruises is all-equity-financed with 53,000 shares. It now proposes to issue $280,000 of debt at an interest rate of 12% and to use the proceeds to repurchase...
-
In a process costing system, companies use predetermined overhead rates to apply overhead
Study smarter with the SolutionInn App