Question

ABC Company purchased equipment on January 1, 2009 for $70,000. It was estimated that the equipment...

ABC Company purchased equipment on January 1, 2009 for $70,000. It was estimated that the equipment would have a $5,000 salvage value at the end of its 4-year useful life. It was also estimated that the equipment would produce 100,000 units over its 4-year life. The company used the straight-line depreciation method. If 16,000 units of product were produced in 2009 and 24,000 units were produced in 2010, what was the book value of equipment at December 31, 2010?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Purchase Price = $ 70,000 on January 01, 2009

Salvage Value = $ 5,000

Useful life = 4 years , Depreciation method = Straight Line Method

Depreciable Value = $ 70,000 - $ 5,000 = $ 65,000

Depreciation per year = $ 65,000 / 4 = $ 16,250.

Book Value of Equipment at december 31, 2010 = Purchase price - Depreciation for 2 years

= $ 70,000 - 2 ( $ 16,250 ) = $ 70,000 - $ 32500 = $ 37,500.

Book Value of Equipment at december 31, 2010 = $ 37,500.

Since the company uses Straight Line Method of Depreciation, the details relating to the Units of Production method of depreciation are not relevant.

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
Leo Company purchased equipment on January 1, 2014 for $90,000. It is estimated that the equipment...
Leo Company purchased equipment on January 1, 2014 for $90,000. It is estimated that the equipment will have a $5,000 salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 100,000 units over its 5-year life. Answer Questions below: 1. Compute the amount of depreciation expense for the year ended December 31, 2014, using the straight-line method of depreciation. 2. If 16,000 units of product are produced in 2014 and 24,000...
1.Trouble Company purchased equipment on January 1, 2016, for $60,000. It is estimated that the equipment...
1.Trouble Company purchased equipment on January 1, 2016, for $60,000. It is estimated that the equipment will have a $5,000 salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 100,000 units over its 5-year life. Compute depreciation expense for 2016 using the straight-line method of depreciation. 2. Adriane’s Grocery Store had a beginning inventory of $14,000 and an ending inventory of $19,000. Net sales during the year amounted to $78,000...
Sheffield Corp. purchased equipment on January 1, 2021 for $139,500. It is estimated that the equipment...
Sheffield Corp. purchased equipment on January 1, 2021 for $139,500. It is estimated that the equipment will have a $7,750salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 155,000 units over its 5-year life. Answer the following independent questions. Compute the amount of depreciation expense for the year ended December 31, 2021 using the straight-line method of depreciation. Straight-line method $enter the depreciation expense under the straight-line method for the...
The Vermont Construction Company purchased a truck on January 1, 2009 at a cost of $35000....
The Vermont Construction Company purchased a truck on January 1, 2009 at a cost of $35000. The truck has a useful life of eight years with an estimated salvage value of $6000. The straight-line method is used for book purposes, for tax purposes the track would be depreciated with the MACRS method over its five-year useful life. Determine the depreciation amount to be taken over the useful life of the having truck for both and tax purposes.
Depreciation of assets On January 1, 2020, a company purchased and placed in service some manufacturing...
Depreciation of assets On January 1, 2020, a company purchased and placed in service some manufacturing equipment with a cost of $480,000. The company estimated the machine's useful life to be 5 years or 100,000 units of output with an estimated salvage value of $80,000. During the second year, 18,000 units were produced. What is the depreciation for the second year of the machine’s useful life, assuming the company uses: a. The straight-line method of depreciation b. The units-of-production method...
On January 1, 2016, Sparks Company purchased for $360,000 snow-making equipment having an estimated useful life...
On January 1, 2016, Sparks Company purchased for $360,000 snow-making equipment having an estimated useful life of 8 years with an estimated salvage value of $25,000 and 500,000 units expected to be produced. Depreciation is taken for the portion of the year the asset is used. (a) Complete the form below by determining the depreciation expense and year-end book values of 2015 and 2016 using the 1. Straight Line Method 2. Production assuming 50,000 units produced in 2016 and 60,000...
On January 1, 2017 ABC Company purchased equipment costing $10,000,000, and its residual value is $100,000....
On January 1, 2017 ABC Company purchased equipment costing $10,000,000, and its residual value is $100,000. The estimated useful life of the asset is four years. Further, management expects to use the equipment for 9,900 hours over its life. In 2017 the equipment was used for 1,000 hours, and in 2018 the equipment was used for 5,000 hours. Compute depreciation for calendar years 2017 AND 2018 under the following method Sum-of-the-year’s digits
Use the following information for the next 5 questions: On January 1, 2008, KA Company purchased...
Use the following information for the next 5 questions: On January 1, 2008, KA Company purchased equipment for $105,000. The estimated useful life of the equipment is 10 years, during which time it will be produce 100,000 units. Estimated residual value is $5,000. KA’s fiscal year is January 1 to December 31. 46. If KA Company uses the straight-line method of depreciation, the net book value of the asset at the end of the second year will be: 47. If...
Archie Co. purchased a framing machine for $45,000 on January 1, 2009. The machine is expected...
Archie Co. purchased a framing machine for $45,000 on January 1, 2009. The machine is expected to have a four-year life, with a residual value of $5,000 at the end of four years. Using the sum-of-the-years'-digits method, depreciation for 2009 and book value at December 31, 2009 would be: $18,000 and $27,000. $16,000 and $29,000. $16,000 and $24,000. $18,000 and $22,000.
Sunbeam-Oster purchased high-tech equipment that was placed-in-service on December 1, 2009 at a total cost of...
Sunbeam-Oster purchased high-tech equipment that was placed-in-service on December 1, 2009 at a total cost of $21,000,000. Salvage value was estimated to be $1,150,000. The machinery will be depreciated over 12 years using the straight-line method. On January 1, 2014, Jentz spent $15,200 to overhaul high-tech equipment. After the overhaul, Jentz estimated that the useful life would be extended 4 years beyond its original useful life, and that the salvage value would be reduced to $6,500. For the year ended...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT