Question

1. On January 1, 2018, Sanderson Company acquired a machine for $1,060,000. The estimated useful life...

1. On January 1, 2018, Sanderson Company acquired a machine for $1,060,000.

The estimated useful life of the asset is five years. Residual value at the end of five years is estimated to be $109,000.

What is the book value of the machine at the end of 2019 if the company uses the straight−line

method of depreciation?

2. An asset was purchased for $33,000 on January 1, 2019. The asset's estimated useful life was five years, and its residual value was $4,000. The straight-line method of depreciation was used. Calculate the gain or loss if the asset is sold for $26,000 on December 31, 2019, the last day of the accounting period.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer:- 1)- The book value of the machine at the end of 2019 if the company uses the straight−line method of depreciation is= $679600

Explanation:-

Straight line Method:-

= Cost of asset- Salvage value of asset/No. of useful life (years)

=($1060000-$109000)/5 years

=$951000/5 years = $190200

2018 year depreciation =$190200

Book value at 2018 year =$1060000-$190200=$869800       

2019 year depreciation =$190200

Book value at 2019 year =$869800-$190200=$679600

2)- The loss on asset is ($1200).

Explanation:-

Straight line Method:-

= Cost of asset- Salvage value of asset/No. of useful life (years)

=($33000-$4000)/5 years

=$29000/5 years = $5800

2019 year depreciation =$5800

Book value at 2018 year =$33000-$5800=$27200

Loss on asset =$2600-$27200

=- $1200

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
On January 1, 2019, Delta Company acquired new equipment with an estimated useful life of 5...
On January 1, 2019, Delta Company acquired new equipment with an estimated useful life of 5 years. Cost of the equipment was $5,000,000 with a residual value of $250,000. For income tax purposes, this machinery qualifies as 5-Year property. 3 Years Year 1 Year 2 Year 3 Year 4 MACRS Rates 33.33% 44.45% 14.81% 7.41% Instructions Compute the amounts of depreciation recognized in each of first 4 years (2019, 2020 & 2021) under each of the depreciation methods listed below....
​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...
PP&E EXPENDITURES SUBSEQUENT TO ACQUISITION A. On January 1, 2018, Sanderson Electric Company purchased equipment to...
PP&E EXPENDITURES SUBSEQUENT TO ACQUISITION A. On January 1, 2018, Sanderson Electric Company purchased equipment to be used in its manufacturing process. The equipment cost $60,000, has a six year useful life, no residual value, and will be depreciated using the straight-line method. On January 1, 2019, Sanderson spent $4,000 to repair the equipment and $11,000 to add a feature, which increased the equipment’s operating efficiency and its useful life. After adding the feature, Sanderson decided that the total useful...
A copy machine acquired on May 1 with a cost of $2,545, estimated useful life of...
A copy machine acquired on May 1 with a cost of $2,545, estimated useful life of 3 years, and residual value of $445. Determine the depreciation for the first and second year by the straight-line method and the net book value at the end of the second year. (Circle Final Answers) Straight Line Depreciation for Year 1: Depreciation per year: ($ 2,545 - $ 445) / 3 =$ 700 Per Year 1st year depreciation = 700 / 12 * 8...
Teal Products purchased a machine on January 1, 2014, for $60,200 and estimated its useful life...
Teal Products purchased a machine on January 1, 2014, for $60,200 and estimated its useful life and salvage value at five years and $12,800, respectively. On January 1, 2017, the company added three years to the original useful-life estimate. (a) Compute the book value of the machine as of January 1, 2017, assuming that Teal uses the straight-line method of depreciation. (b) Prepare the journal entry entered by the company to record depreciation on December 31, 2017.
An asset was purchased for $38 000 n January 1, 2018. The assor's estimated useful to...
An asset was purchased for $38 000 n January 1, 2018. The assor's estimated useful to was five years, and its residual value is $8.000 The straight-line method of depreciation was used calculate the gain or loss if the asset is sold for $19,000 on December 31, 2019, the last day of the accounting period
Lexis Company purchased equipment on January 1, 2012 for $35,500. The estimated useful life of the...
Lexis Company purchased equipment on January 1, 2012 for $35,500. The estimated useful life of the equipment was 7 years and the estimated residual value was $4,000. After using the straight-line method of depreciation for 3 years, the estimated useful life was revised to 9 years on January 1, 2015. How much is depreciation expense for 2015? A) $2,444 B) $3,000 C) $2,000 D) $3,667
Burrell Company purchased a machine for $35,000 on January 2, 2016. The machine has an estimated...
Burrell Company purchased a machine for $35,000 on January 2, 2016. The machine has an estimated service life of 5 years and a zero estimated residual value. The asset earns income before depreciation and income taxes of $17,500 each year. The tax rate is 30%. Required: Compute the rate of return earned (on the average net asset value) by the company each year of the asset's life under the straight-line and the double-declining-balance depreciation methods. Assume that the machine is...
Torge Company bought a machine for $82,000 cash. The estimated useful life was five years and...
Torge Company bought a machine for $82,000 cash. The estimated useful life was five years and the estimated residual value was $7,000. Assume that the estimated useful life in productive units is 171,000. Units actually produced were 45,600 in year 1 and 51,300 in year 2. 1. Determine the appropriate amounts to complete the following schedule. Depreciation Expense for Book Value at the End of Method of Depreciation Year 1 Year 2 Year 1 Year 2 Straight-line Units-of-production Double-declining-balance 2-a....
On 1 January 2018 Augusta Ltd paid $39,500 for a machine with a useful life of...
On 1 January 2018 Augusta Ltd paid $39,500 for a machine with a useful life of 10 years and a residual value of $1,500. The company uses a straight-line method to allocate depreciation expense. The machine was sold on 31 May 2020 for $8,000. Augusta Ltd has its year-end on 30 June. Required Prepare all necessary general journal entries to recognise the sale of the machine on 31 May 2020. Show all workings.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT