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Meaning of Depreciation

Jacky Chan and Raymond Poon are university students in Hong Kong. During an Accounting lecture, the lecturer asked them about the meaning of depreciation. Jacky Chan said that depreciation is what happens when an asset wears out. However, Raymond Poon said that depreciation is the process of building up a cash fund to replace

Accounting: Depreciation and Amortization

Part 1 Field Instruments completed the following transactions and events involving its machinery: 2004 Jan. 1 Paid $106,600 cash plus $6,400 in sales tax for a new machine. The machine is estimated to have a six-year life and a $9,800 salvage value. Dec. 31 Recorded annual straight-line depreciation on the machiner


A machine cost $500,000 on April 1, 2006. Its estimated salvage value is $50,000 and its expected life is 8 years. Calculate Depreciation expense to the nearest dollar 1. Straight-line for 2006 2. Double declining balance for 2007 3. Sum-of-the year's digits PLEASE SHOW ALL WORK

Depreciation Schedule

The White Pine Hotel has always depreciated its fixed assets using the straight-line method for both book and tax purposes. L.M. Tree, a newly hired tax consultant, has suggested this result in excessive taxes and has recommended the DDB method be used for future equipment purposes. Planned equipment purposes for 20X2 and oth

Recording Depreciation

On July 1 of the current year, a company purchased and placed in service a machine with a cost of $240,000. The company estimated the machine's useful life to be four years or 60,000 units of output with an estimated salvage value of $60,000. During the current year, 15,000 units were produced. Prepare the necessary December

Depreciation & Cost Recovery for a commercial building

My company bought a new factory building last tax filing year (in 2004) for $10,000,000. Due to computer crashes, hurricanes and a string of ill-begotten issues, we are just now finalizing that year's accounting and tax entries, as well as this year's (2005). We are fortunate to have the necessary federal extensions. What wo

Depreciation calculation for Nyland Company

On July 1, 2004, Nyland Company purchased for $1,440,000, snow-making equipment having an estimated useful life of 5 years with an estimated salvage value of $60,000. Depreciation is taken for the portion of the year the asset is used. INSTRUCTIONS (a) Complete the form below by determining t

Depreciation for rental property in the Great Smokey Mountains

Mackenzie owns a condominium in the Great Smokey Mountains. During the year, Mackenzie uses the condo a total of 27 days. The condo is also rented to tourists for a total of 73 days and generates rental income of $8,900. Mackenzie incurs the following expenses in the condo: Expense Amount

Concept of Depreciation

Can you please explain the concept of depreciation? can you please show examples. can you tell me how does straight line depreciation differ from MACRs Depreciation? Thank you very much this will help me to understand the information and help me study for my test.

Depreciation using MACRS

BC Corporation is not having a good year. Sally and Ed are expecting the company to absorb a $40,000 loss. As a result, they have decided to depreciate $130,000 of equipment using the straight-line method for their books and using the 200% MACRS for tax purposes. Therefore, depreciation for the equipment will show up as $17,000

Depreciation Schedule

Rogers Company purchased a new computer for $100,000. It is estimated that the computer will have a $10,000 salvage value at the end of its 5-year useful service life. The double-declining-balance method of depreciation will be used. Instructions Prepare a depreciation schedule which shows the annual depreciation expense on


What role does depreciation play in break-even analysis based on accounting flows? Based on cash flows? Which perspective is longer term in nature?


The following information is available for Queen Company, which has an accounting year end on December 31, 2003. 1. A delivery truck was purchased on June 1, 2001, for $50,000. It was estimated to have a $5,000 salvage value after being driven 120,000 miles. During 2003, the truck was driven 20,000 miles. The units-of-activit

Accumulated Depreciation

Howard Company purchased equipment in 1994 for $60,000 and estimated a $6,000 salvage value at the end of the equipment's 10-year useful life. At December 31, 2000, there was $37,800 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On March 31, 2001, the equipment was