Question

On June​ 30, 2016, Colora Printers purchased a printer for $55,000. It expects the printer to...

On June​ 30, 2016, Colora Printers purchased a printer for $55,000. It expects the printer to last for four years and have a residual value of $5,000. Compute the depreciation expense on the printer for the year ended December​ 31, 2016, using the straight−line method.​ (Round any intermediate calculations to two decimal​ places, and your final answer to the nearest​ dollar.)

a. $13,750

b. $12,500

c. $6,250

d. $7,292

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Cost of asset = 55,000

Salvage value = 5,000

Useful life = 4 years

Annual depreciation = ( Cost - Salvage value )/ Useful life

= (55,000 - 5,000)/4

= $12,500

As the asset is purchased exactly at the mid of the year therefore half year convention will be applied and only half of the annual depreciation will be the depreciation expense for the year December 31,2016.

Therefore the depreciation expense will be

= 12,500/2

= $6,250

Therefore the correct option is C

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Sketches Inc. purchased a machine on January 1, 2016. The cost of the machine was $41,000....
Sketches Inc. purchased a machine on January 1, 2016. The cost of the machine was $41,000. Its estimated residual value was $13,000 at the end of an estimated 5-year life. The company expects to produce a total of 20,000 units. The company produced 1,500 units in 2016 and 1,950 units in 2017. Required: a. Calculate depreciation expense for 2016 and 2017 using the straight-line method. b. Calculate the depreciation expense for 2016 and 2017 using the units-of-production method. (Do not...
When Steely Equipment purchased a 3D printer on Jan 1, 2016 for $12,000, it was incorrectly...
When Steely Equipment purchased a 3D printer on Jan 1, 2016 for $12,000, it was incorrectly recorded to the Prepaid Supplies account. The error was discovered on December 31, 2017, before adjusting entries were posted. Based on its intended usage, Steely expected the machine would last for four years and have no residual value. If equipment is depreciated on a straight-line basis, which of the following items would appear on the balance sheet? Select all that apply. A : Accumulated...
Dartin Corporation sold a piece of equipment on June 30, 2019 for $65,000 cash. The equipment...
Dartin Corporation sold a piece of equipment on June 30, 2019 for $65,000 cash. The equipment had been purchased on January 1, 2016 for $275,000. It had an estimated useful life of 5 years and a $25,000 residual value. Dartin Corp. has been using the straight-line method of depreciation and has a year-end of December 31st. Give any journal entry(ies) required at the time of disposal. (Round to the nearest dollar).
Depreciation Methods Gruman Company purchased a machine for $198,000 on January 2, 2016. It made the...
Depreciation Methods Gruman Company purchased a machine for $198,000 on January 2, 2016. It made the following estimates: Service life 5 years or 10,000 hours Production 200,000 units Residual value $20,000 In 2016, Gruman uses the machine for 1,800 hours and produces 44,000 units. In 2017, Gruman uses the machine for 1,500 hours and produces 35,000 units. If required, round your final answer to the nearest dollar. Required: Compute the depreciation for 2016 and 2017 under each of the following...
Depreciation Methods Gruman Company purchased a machine for $198,000 on January 2, 2016. It made the...
Depreciation Methods Gruman Company purchased a machine for $198,000 on January 2, 2016. It made the following estimates: Service life 5 years or 10,000 hours Production 180,000 units Residual value $ 18,000 In 2016, Gruman uses the machine for 2,000 hours and produces 50,000 units. In 2017, Gruman uses the machine for 1,200 hours and produces 32,000 units. If required, round your final answers to the nearest dollar. Required: Compute the depreciation for 2016 and 2017 under each of the...
Genco Manufacturing purchased a piece of equipment on July 26th, 2016, at a cost of $72,000....
Genco Manufacturing purchased a piece of equipment on July 26th, 2016, at a cost of $72,000. The estimated residual value is $5,400 with a useful life of 5 years. Assume a production life of 60,000 units. Compute the depreciation for years 2016 and 2017 using the two depreciation methods below; Straight Line Method Units-of-production (in 2016, there was 5,000 units produced, and in 2017, there were 18,000 units produced).
Case E. Matson Company purchased the following on January 1, 2016:      • Office equipment at...
Case E. Matson Company purchased the following on January 1, 2016:      • Office equipment at a cost of $42,000 with an estimated useful life to the company of three years and a residual value of $12,600. The company uses the double-declining-balance method of depreciation for the equipment. • Factory equipment at an invoice price of $806,800 plus shipping costs of $22,000. The equipment has an estimated useful life of 112,000 hours and no residual value. The company uses the...
A company purchased a computer system on January 1. Its cost was $55,000 and it had...
A company purchased a computer system on January 1. Its cost was $55,000 and it had an estimated salvage value of $10,000. It was expected to have a useful life of 5 years. Required: a. To the nearest dollar, what’s the depreciation for year 1 using straight-line method? Please prepare the journal entry to record the depreciation. b. To the nearest dollar, what’s the depreciation for year 1 using double-declining method? c. Assume the computer system is estimated to be...
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...
Storm Delivery Company purchased a new delivery truck for $53,400 on April 1, 2016. The truck...
Storm Delivery Company purchased a new delivery truck for $53,400 on April 1, 2016. The truck is expected to have a service life of 5 years or 150,000 miles and a residual value of $4,320. The truck was driven 8,200 miles in 2016 and 11,800 miles in 2017. Storm computes depreciation to the nearest whole month. Required: Compute depreciation expense for 2016 and 2017 using the For interim computations, carry amounts out to two decimal places. Round your final answers...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT