Question

Apex Fitness Club uses straight-line depreciation for a machine costing $23,860, with an estimated four-year life...

Apex Fitness Club uses straight-line depreciation for a machine costing $23,860, with an estimated four-year life and a $2,400 salvage value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which it will have an estimated $2,000 salvage value.
  
Required:
1. Compute the machine’s book value at the end of its second year.
2. Compute the amount of depreciation for each of the final three years given the revised estimates.

Apex Fitness Club uses straight-line depreciation for a machine costing $23,860, with an estimated four-year life and a $2,400 salvage value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which it will have an estimated $2,000 salvage value.

Book value at point of revision
Revised salvage value
Remaining depreciable cost
Years of life remaining
Revised annual depreciation years 3-5   

Homework Answers

Answer #1
  • Workings

A

Original cost

$23,860

B

Original salvage value

$2,400

C = A - B

Original depreciable cost

$21,460

D

Original life

4

E = C/D

Straight line annula Depreciation

$5,365

F = E x 2

2 Year balance of Accumulated Depreciation

$10,730

G = A - F

Book value at point of revision

$13,130

  • Requirements

A

Book value at point of revision

$13,130

B

Revised salvage value

$2,000

C = A - B

Remaining depreciable cost

$11,130

D

Years of life remaining

3

E = C/D

Revised annual depreciation year 3-5

$3,710

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
Apex Fitness Club uses straight-line depreciation for a machine costing $26,700, with an estimated four-year life...
Apex Fitness Club uses straight-line depreciation for a machine costing $26,700, with an estimated four-year life and a $2,850 salvage value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which it will have an estimated $2,400 salvage value. Required: 1. Compute the machine’s book value at the end of its second year. 2. Compute the amount of depreciation for each of the final three years given the...
Apex Fitness Club uses straight-line depreciation for a machine costing $25,300, with an estimated four-year life...
Apex Fitness Club uses straight-line depreciation for a machine costing $25,300, with an estimated four-year life and a $2,250 salvage value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which it will have an estimated $1,800 salvage value. Required: 1. Compute the machine’s book value at the end of its second year. 2. Compute the amount of depreciation for each of the final three years given the...
Supreme Fitness Club uses straight-line depreciation for a machine costing $20,850, with an estimated four-year life...
Supreme Fitness Club uses straight-line depreciation for a machine costing $20,850, with an estimated four-year life and a $2,250 salvage value. At the beginning of the third year, Supreme determines that the machine has three more years of remaining useful life, after which it will have an estimated $1,800 salvage value.    (1) Compute the machine’s book value at the end of its second year. (Omit the "$" sign in your response.)      Book value $        (2) Compute the...
Oprian Company uses straight line depreciation for a machine costing $47,300. When it was purchased, the...
Oprian Company uses straight line depreciation for a machine costing $47,300. When it was purchased, the company estimated that it would have a useful life of 7 years and a salvage value of $5,000. At the start of the fourth year, the company has revised its estimates. The machine will last an additional 5 years and the salvage value will be only $4,000. Compute the machine's book value at the end of its third year and the amount of depreciation...
Swindall Industries uses straight-line depreciation on all of its depreciable assets. The company records annual depreciation...
Swindall Industries uses straight-line depreciation on all of its depreciable assets. The company records annual depreciation expense at the end of each calendar year. On January 11, 2014, the company purchased a machine costing $94,000. The machine’s useful life was estimated to be 12 years with an estimated residual value of $19,400. Depreciation for partial years is recorded to the nearest full month. In 2018, after almost five years of experience with the machine, management decided to revise its estimated...
A machine costing $215,000 with a four-year life and an estimated $19,000 salvage value is installed...
A machine costing $215,000 with a four-year life and an estimated $19,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 490,000 units of product during its life. It actually produces the following units: 121,500 in 1st year, 122,900 in 2nd year, 120,900 in 3rd year, 134,700 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate—this difference was not predicted....
When originally purchased, a vehicle costing $25,020 had an estimated useful life of 8 years and...
When originally purchased, a vehicle costing $25,020 had an estimated useful life of 8 years and an estimated salvage value of $2,700. After 4 years of straight-line depreciation, the asset's total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated salvage value. The depreciation expense in year 5 equals:
When originally purchased, a vehicle costing $24,660 had an estimated useful life of 8 years and...
When originally purchased, a vehicle costing $24,660 had an estimated useful life of 8 years and an estimated salvage value of $2,500. After 4 years of straight-line depreciation, the asset's total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated salvage value. The depreciation expense in year 5 equals:
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
1. A machine costing RM30000 has a life expectancy of four years and zero salvage value....
1. A machine costing RM30000 has a life expectancy of four years and zero salvage value. Using the straight line method, calculate the annual depreciation. 2. A firm bought a machine for RM5000. The machine is expected to be obsolete in four years with a salvage value of RM1000. Find the book value of the machine after three years using the straight line method. 3. A firm bought a machine for RM5000. The machine is expected to be obsolete in...