Question

19. Big Sips received new information as of January 1, 20Y3, for an asset that was...

19. Big Sips received new information as of January 1, 20Y3, for an asset that was originally purchased for $45,200 on January 1, 20Y1. The original expected useful life was seven years, with an estimated residual value of $4,500. Using the information, Big Sips now estimates the machine will last another 10 years with a residual value of $5,000. If Big Sips uses the straight-line method to determine depreciation expense, calculate the following: a. Accumulated depreciation as of January 1 (round to the nearest whole dollar) b. Revised annual depreciation expense for December 31 (round to the nearest whole dollar)

Homework Answers

Answer #1

Answer

a.

Cost of Asset = $45,200

Salvage Value = $4,500

No. of Useful Years = 7

Depreciation per year = (Cost – Salvage Value) / No. of Useful years

= (45,200 – 4,500) / 7

= $5,814 per year

Accumulated Depreciation after 2 Years = Depreciation per year * 2 Years

= $5,814 * 2

Accumulated Depreciation after 2 Years = $11,628

b.

It is mentioned that now the Asset has $5,000 Residual value and remaining life of 10 Years.

Depreciation for December 31 = [(Cost – Depreciation till now) – New Salvage Value] / No. of useful years

= [(45,200 – 11,628) – 5,000] / 10

= 28,572 / 10

Depreciation for December 31 = $2,857

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
An asset was purchased for $120,000 on January 1, 2010 and originally estimated to have a...
An asset was purchased for $120,000 on January 1, 2010 and originally estimated to have a useful life of 10 years with a residual value of $10,000. At the beginning of 2012, it was determined that the remaining useful life of the asset was only 4 years with a residual value of $2,000. Calculate the 2012 depreciation expense using the revised amounts and straight line method.
Equipment was acquired on January 1, 2010, at a cost of ¥2,000,000. The equipment was originally...
Equipment was acquired on January 1, 2010, at a cost of ¥2,000,000. The equipment was originally estimated to have a residual value of ¥100,000 and an estimated life of 10 years. Depreciation has been recorded through December 31, 2013, using the straight-line method. On January 1, 2014, the estimated residual value was revised to ¥140,000 and the useful life was revised to a total of 8 years. Instructions Determine the Depreciation Expense for 2014. Ex. 274 Equipment was acquired on...
An asset was purchased for $120,000 on January 1, 2010 and originally estimated to have a...
An asset was purchased for $120,000 on January 1, 2010 and originally estimated to have a useful life of 10 years with a residual value of $10,000. At the beginning of 2012, it was determined that the remaining useful life of the asset was only 4 years with a residual value of $2,000. Calculate the 2012 depreciation expense using the revised amounts and straight line method. Please show work to help me understand the material.
10. An asset was purchased for $138,000 on January 1, Year 1 and originally estimated to...
10. An asset was purchased for $138,000 on January 1, Year 1 and originally estimated to have a useful life of 12 years with a residual value of $9,000. At the beginning of the third year, it was determined that the remaining useful life of the asset was only 4 years with a residual value of $2,000. Calculate the third-year depreciation expense using the revised amounts and straight-line method $27,625.00 b.$29,125.00 c.$28,625.00 d.$29,625.00
​Carpenters, Inc., a manufacturing​ company, acquired equipment on January​ 1, 2017 for $550,000. Estimated useful life...
​Carpenters, Inc., a manufacturing​ company, acquired equipment on January​ 1, 2017 for $550,000. Estimated useful life of the equipment was seven years and the estimated residual value was $16,000. On January​ 1, 2020, after using the equipment for three​ years, the total estimated useful life has been revised to nine total years. Residual value remains unchanged. The company uses the straight minus−line method of depreciation. Calculate depreciation expense for 2020.​ (Round any intermediate calculations to two decimal​ places, and your...
Disposal of Fixed Asset Equipment acquired on January 8, 20Y1, at a cost of $660,000, has...
Disposal of Fixed Asset Equipment acquired on January 8, 20Y1, at a cost of $660,000, has an estimated useful life of 19 years and an estimated residual value of $79,200. a. What was the annual amount of depreciation for the years 20Y1, 20Y2, and 20Y3, using the straight-line method of depreciation? Round annual depreciation to the nearest dollar and use this amount in your follow-on calculations. Depreciation expense 20Y1 $ 20Y2 $ 20Y3 $ b. What was the book value...
Equipment acquired on January 9, 20Y3, at a cost of $699,000, has an estimated useful life...
Equipment acquired on January 9, 20Y3, at a cost of $699,000, has an estimated useful life of 17 years, an estimated residual value of $153,780, and is depreciated by the straight-line method. a. What was the book value of the equipment at the end of the fifth year, December 31, 20Y7? Round your interim calculations and final answer to the nearest dollar. $ For decreases in accounts or outflows of cash, enter your answers as negative numbers. Round annual depreciation...
Required information [The following information applies to the questions displayed below.] Wardell Company purchased a mini...
Required information [The following information applies to the questions displayed below.] Wardell Company purchased a mini computer on January 1, 2019, at a cost of $32,350. The computer has been depreciated using the straight-line method over an estimated five-year useful life with an estimated residual value of $3,100. On January 1, 2021, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $930. Required: 1. Prepare the appropriate...
27. More Value has a building that was originally purchased for $200,000 on January 1, 2015....
27. More Value has a building that was originally purchased for $200,000 on January 1, 2015. The company expected the building to have a useful life of 25 years with a $20,000 salvage value. At the beginning of 2020, the company revises its useful life to a total of 35 years with a $14,000 salvage value. If the company uses straight-line method to calculate depreciation, determine the following: a. Accumulated depreciation to date b. Book value at the beginning of...
Hoover Corporation purchased equipment on January 1,2019,for$610,000.In 2019 and 2020,Hoover depreciated the asset on a straight-line...
Hoover Corporation purchased equipment on January 1,2019,for$610,000.In 2019 and 2020,Hoover depreciated the asset on a straight-line basis with an estimated useful life of eight years and a$10,000 residual value.In 2021,due to changes in technology,Hoover revised the useful life to a total of four years with no residual value.What depreciation would Hoover record for the year 2021 on this equipment?(Round your answer to the nearest dollar amount.)