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Depreciation

Straight Line Methods of Depreciation

An asset was purchased for \$60,000 and originally estimated to have a useful life of 10 years with a residual value of \$3,000. After two years of straight line depreciation, it was determined that the remaining useful life of the asset was only 2 years with a residual value of \$2,000. Calculate this year's depreciation using t

What is accumulated depreciation?

Does the balance in Accumulated depreciation - Machinery account represent funds to replace the machinery when it wears out? If not, what does it represent?

Adjustment of Depreciable Base of a truc which was overhauled.

A truck was acquired on July 1, 2004 at a cost of \$270,000. The truck had a six-year useful life and an estimated salvage value of \$30,000. The straight-line method of depreciation was used. On January 1, 2007, the truck was overhauled at a cost of \$25,000, which extended the useful life of the truck for an additional two

Depreciation expense deductions & Realized and Recognized gains/losses

Sam Johnson started a small machine shop, Machines, Inc., in his garage and incorporated it in March of 2002 as a calendar-year corporation. At that time, he began using his personal computer and tools solely for the business as part of his contribution to the corporation. The computer cost \$2,700 but had a fair market value of

Deduction Amounts for Depreciation and Recapture

On June 26, 2004, Elaine purchased and placed into service a new computer system costing \$8,000. The computer system was used 80 percent for business and 20 percent for personal use in both 2004 and 2005. Elaine claimed only regular MACRS depreciation. In 2006, the computer system was used 45 percent for business and 55 percent

Key Information of Depreciation Expense

Equipment that cost \$300,000 and had a book value of \$156,000 was sold for \$180,000. Data from the comparative balance sheets are: 12/31/08 12/31/07 Equipment \$2,160,000 \$1,950,000 Accumulated Depreciation 660,000 570,000 Depreciation expense for 2

Depreciation Schedule: Balls and Bats, Inc.

Balls and Bats, Inc. purchased equipment on January 1, 2005, at a cost of \$100,000. The estimated useful life is 4 years with a salvage value of \$10,000. 1. Prepare two different depreciation schedules for the equipment - one using the double-declining balance method, and the other using the straight-line method. (Round to

The Lancaster Corporation purchased a piece of equipment three years ago for \$250,000. It has an asset depreciation range (ADR) midpoint of eight years. The old equipment can be sold for \$97,920.

Replacement decision analyzed by using a total analysis of both the old and new machines or by using an incremental analysis that emphasizes the changes in cash flows between the old and the new machines. PROBLEM The Lancaster Corporation purchased a piece of equipment three years ago for \$250,000. It has an asset depreciati

Gates Corporation's accumulated depreciation

Gates Corporation's accumulated depreciation-equipment increased by \$8,000, while patents decreased by \$5,200 between balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition the income statement showed a loss of \$6,000 from the sale of investments. Reconcile a net

Calculating Revised Depreciation: Example Problem

My ledger shows equipment = 64,000, accumulated depreciation = 18,000 you use straight line method with a 10 yr useful life and 4,000 salvage and then on this date of jan. 1 2007 it is determined that the useful life is only 5 yrs but the salvage value is the same. compute the revised annual depreciation. I came up with: e

Combined Depreciation

6. Answer_____________ Michelle has an advertising business that she reports on Schedule C of her personal tax return. On May 1, 2006, Michelle purchased a Toyota Camry for \$22,000. She purchased a copier for \$30,000 on October 15th and office furniture for \$50,000 on November 1st. All assets acquired are new. The Camry is used

Flo Choi Case

Flo Choi owns a small business and manages the accounting. Her company just finished a year in which a large amount of borrowed funds was invested in a new building addition as well as in equipment and fixture additions. Choi's banker requires her to submit semiannual financial statements so he can monitor the financial health o

Accumulated Depreciation

File contains a real life example (from The Coca-Cola Company) of accumulated depreciation.

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

Depreciation questions: Identify decisions that managers like Choi must make in applying depreciation methods.

Flo Choi owns a small business and manages its accounting. Her company just finished a year in which a large amount of borrowed funds was invested in a new building addition as well as in equipment and fixture additions. Choi's banker requires her to submit semiannual financial statements so he can monitor the financial health o

Xavier Construction Depreciation

Calculating Depreciation. See attached file for full problem description. Xavier construction cash price for assets. Estimated market values - land, building, land improvements, vehicle Useful life Schedule - apportioned cost depreciation - straight line , double declining balance.

Accumulated depreciation of 90,000

A machine cost 120,000 has annual depreciation of 20,000 and has accumulated depreciation of 90,000 on December 31, 2006. On April 1, 2007 when the machine has a market value of 27,500, it is exchanged for a machine with a fair value of 135,000 and the proper amount of cash is paid. The exchange lacked commercial substance.

Depreciation

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 allowed and depreciation expense

Roberta, a sole proprietor who uses the calendar year as her tax year, acquires two business machines during 2006. Machine C, a seven-year asset, was acquired on January 20, 2006, for \$80,000 and Machine D, a five-year asset, was acquired on August 1, 2006, for \$40,000. No other property bylaws acquired in 2006. a. What is t

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

Calculating Depreciation Under Different Methods

See the attached file. The Blue Spruce Inn has purchased a shuttle bus to transport guests to and from a local ski lodge. The cost of the bus is \$80000; its salvage value is \$10000; and its life is five years. Required: Calculate the second year's depreciation under each of the following methods. 1. Straight-line 2. Sum o

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

Prepare a 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

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

Depletion and Depreciation

Problem: Cleanburn Coal Company purchased coal-leasing land that contains 800,000 tons of coal for \$21,700,000. Soil test by geologists cost \$35,250 for the purchased land, but tests at other sites that yielded negative results cost \$116,250. Clearburn uses the full-cost method for exploration costs (i.e. the company's tota

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.

Accounting for Depreciation

Why is it necessary to account for depreciation? In what situations would we not want to depreciate an asset?