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Transcribed image text: Ch 08 Ex 8-16 Help Save&Exit Submt Check my work Exercise 8-16 Disposal of assets LO P2 Diaz Company owns a milling machine that cost $126,900 and has accumulated depreciation of $91,600. Prepare the entry to record the disposal of the milling machine on January 3 under each of the following independent …
A replacement machine costs $3 million now and requires maintenance costs of $500,000 at the end of each year during its economic life of five years. At the end of the five years, the new machine will have a salvage value of $500,000. It will be fully depreciated by the straight-line method. In 5 years, a replacement machine will cost $3,500,000.
Depreciation. Conceptually, depreciation is the reduction in the value of an asset over time due to elements such as wear and tear. For instance, a widget-making machine is said to "depreciate" when it produces fewer widgets one year compared to the year before it, or a car is said to "depreciate" in value after a fender bender or the discovery of a faulty transmission.
Ring Co. owns a delivery van that was purchased two years ago for $25,000. Ring has depreciated the van for two years at a straight-line amount of $4,000 per year. The book value of this van at the end of the second year would be $
Millworks Company owns a milling machine that cost $125,000 and has accumulated depreciation of $91,000. Prepare the entry to record the disposal of the milling machine on January 5 under each of the following independent situations. 1. The machine needed extensive repairs, and it was not worth repairing.
Accumulated Depreciation- Machinery 10,000 Machinery 10,000 Example #6: On January 2 Company W discarded Machine #2, which originally cost $25,000 and has accumulated depreciation of $20,000. Prepare a journal entry to record the discarding of the machinery. Solution #6: Accumulated Depreciation- Machinery 20,000 Machinery 25,000
Therefore, Company A would depreciate the machine at the amount of $16,000 annually for 5 years. The depreciation rate can also be calculated if the annual depreciation amount is known. The depreciation rate is the annual depreciation amount / total depreciable cost. In this case, the machine has a straight-line depreciation rate of $16,000 ...
Practical Accounting 1 Review. Question 1. Alley Company has in issue of 20,000,000 ordinary shares of P1 par each. As at 1 January 2011, its retained profits were P10,000,000. On 30 June 2011, it paid a net dividend of P1,800,000 to shareholders after the proposed final dividend of 10% per share for the preceding financial year 2010 was ...
For example, if a company's machinery has a 5-year life and is only valued $5000 at the end of that time, the salvage value is $5000. read more at the end of its useful life. The equipment is to be depreciated on a straight-line method. Determine the accumulated depreciation at the end of 1 st year and 3 rd year.
The machine has a zero salvage value. The company is considering buying a technologically improved machine at a cost of $232,000. The new machine will save $50,000 per year after taxes in cash operating costs. If the company decides not to buy the new machine, it can use the old machine for an indefinite time by incurring heavy repair costs.
Millworks Company owns a milling machine that cost $125,000 and has accumulated depreciation of $91,000. Prepare the entry to record the disposal of the milling machine on January 5 under each of the following independent situations. 1. The machine needed extensive repairs, and it was not worth repairing.
The depreciation expense amount changes every year because the factor is multiplied with the previous period's net book value of the asset, decreasing over time due to accumulated depreciation. For example, Company A owns a vehicle worth $100,000, with a useful life of 5 years. They want to depreciate with the double-declining balance. In the ...
Jurassic Company owns equipment that cost $900,000 and has accumulated depreciation of $380,000. The expected future net cash flows from the use of the asset are expected to be $500,000. The fair value of the equipment is $400,000. Prepare the journal entry to record the impairment loss.
Accumulated Depreciation and Book Value . Accumulated depreciation is used in calculating an asset's net book value. This is the …
To calculate depreciation subtract the asset's salvage value from its cost to determine the amount that can be depreciated. Divide this amount by the number of years in the asset's useful lifespan. Divide by 12 to tell you the monthly depreciation for the asset.
The overhead costs mainly consist of Depreciation. (iii) Company Z produces two different labour intensive products. The contribution per unit in both products is very high. The BEP is very low. All the work is carried on efficiently to meet target costs. (iv) Company Y produces 4 different products using different production facilities. 1½×4=6
Ottawa Corporation owns machinery that cost $20,000 when purchased on July 1, 2011. Depreciation has been recorded at a rate of $2,400 per year, resulting in a balance in accumulated depreciation o...
Chapter 20: Questions & Answers. 1 The financial management function. The examiner's style is to test this area of the syllabus as partof a much larger question. Usually, a part (c), or part (d), you willhave to discuss or explain some of the key aspects and theirimplications. The questions given here replicate that style.
The "Payroll" file details the company's payroll for the last 5 pay periods of the year. You will be conducting some audit procedures for California Crunch and analyzing the results. Using the two analysis test files provided Prepare a 2-3 page analysis discussing what you found as a result of your analysis and what internal controls you would recommend to the owner of …
Diaz Company owns a milling machine that cost $250,000 and has accumulated depreciation of $182,000. Prepare the entry to record the disposal of the milling machine on January 3 under each of the following independent situations. 1. The machine needed extensive repairs, and it was not worth repairing. Diaz disposed of the machine, receiving ...
The depreciated cost can also be calculated by deducting the sum of depreciation expenses from the acquisition cost. For example, a manufacturing company purchased a machine at the beginning of 2017. The purchase price of the machine was $100,000, and the company paid another $10,000 for shipment and installation.
Depreciation is the process of deducting the total cost of something expensive you bought for your business. But instead of doing it all in one tax year, you write off parts of it over time. When you depreciate assets, you can plan how much money is written off each year, giving you more control over your finances.
d. asset's cost less accumulated depreciation. 15. Equipment that cost $144,000 and on which $120,000 of accumulated depreciation has been recorded was disposed of for $36,000 cash. The entry to record this event would include a a. gain of $12,000. b. loss of $12,000. c. credit to the Equipment account for $36,000. d. credit to Accumulated ...
Millworks Company owns a milling machine that cost $125,000 and has accumulated depreciation of $91,000. Prepare the entry to record the disposal of the milling machine on January 5 under each of the following independent situations. 1. The machine needed extensive repairs, and it was not worth repairing.
The management of Jasper Equipment Company is planning to purchase a new milling machine that will cost $160,000 installed. The old milling machine has been fully depreciated but can be sold for $15,000. The new machine will be depreciated on a straight-line basis over its 10-year economic life to an estimated salvage value of $10,000.
Diaz Company owns a milling machine that cost $250,000 and has accumulated depreciation of $182,000. Prepare the entry to record the disposal of the milling machine on January 3 under each of the following independent situations.
Diaz Company owns a milling machine that cost $250,000 and has accumulated depreciation of $182,000. Prepare the entry to record the disposal of the milling machine on January 3 under each of the following independent situations. The machine needed extensive repairs, and it was not worth repairing.
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