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    Depreciation

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    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

    Red Tiger Company depreciation

    Red Tiger Company purchased packaging equipment on January 3, 2005, for $180,000. The equipment was expected to have a useful life of 3 years, or 22,320 operating hours, and a residual value of $12,600. The equipment was used for 12,500 hours during 2005, 6,000 hours in 2006, and 3,820 hours in 2007. Determine the amou

    Basis for a New Truck

    Garnet, Inc., owns a delivery truck which initially cost $30,000. After depreciation of $15,000 had been deducted, the truck was traded-in on a new truck that cost $40,000. Garnet was required to pay the car dealer $20,000 in cash. What is Garnet's basis for the new truck? a. $0. b. $35,000. c. $40,000.

    Methods of Calculating Depreciation

    An item of equipment acquired on Jan 1 at a cost of $100,000 has an estimated life of 10 years. Assuming that the equipment will have a salvage value of $10,000, determine the depreciation for each of the first three years by the: a) Straight line method b) Declining balance method c) Sum of the years 'digits method

    Entry to Record Depreciation Expense

    The entry to record depreciation expense: increases a contra long-term asset and decreases net income. decreases a contra long-term asset and decreases net income. decreases working capital and decreases net income. decreases a long-term asset and increases a contra long-term asset.

    What are at least four depreciation methods

    1) What are at least four depreciation methods that are available to a company? 2) What are the similarities and differences? 3) Why does a company select one method over another?

    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

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

    BE3-4 Prepare adjusting entry for depreciation for Easton company

    At the end of its first year, the trial balance of Easton Company shows Equipment $30,000 and zero balances in Accumulated Depreciation?Equipment and Depreciation Expense. Depreciation for the year is estimated to be $6,000. Prepare the adjusting entry for depreciation at December 31, post the adjustments to T accounts, and i

    Business Problem: Depreciation

    Problem 1: On January 1, Year 1, Jayco purchased a machine for $6000. It had an estimated salvage value of $400 and a life of seven years. The straight-line method of depreciation was used. At mid-year in Year 4, Jayco sold the machine for $4500 cash. Required: a. What is the book value of the machine a the time of the sal

    Adjustment and Depreciation Expense

    Question no. 38 On December 31, 2004, special insurance costs, incurred but unpaid, where not recorded. If these insurance costs were related to work in process, what is the effect of the omission on accrued liabilities and retained earnings in the December 31, 2004 balance sheet? Accrued Liabilities / Retained Earnings a

    Computing Depreciation

    Equipment purchased at the beginning of the fiscal year for $150,000 is expected to have a usful life of 5 years, or 15,000 operating hours, and a residual value f $30,000. Computing the depreciation for the first and second years of use by each of the following methods: (a) straight-line (b) units-of-production (2,500 hour

    Machinery is purchased on july 1 of the current fiscal year for $180,000. It is expected to have a useful life of 4 years, or 20,000 operating hurs, and a risidual value of $20,000. Compute the depreciation for the last si months of the current fiscal year ending December 31 by each of the following methods:

    Machinery is purchased on july 1 of the current fiscal year for $180,000. It is expected to have a useful life of 4 years, or 20,000 operating hurs, and a risidual value of $20,000. Compute the depreciation for the last six months of the current fiscal year ending December 31 by each of the following methods: (a) straight-

    Depreciation Expense: Example Problem

    On January 1, 2003, Eiger Company purchased a new piece of machinery. The machine cost $200,000. Optional equipment for the machine was also purchased at a cost of $14,000. The manufacturer charged 1,400 to install the option. The estimated life of the machine was 7 years and the estimated service life of the machine in hours wa

    Revised Depreciation

    Accumulated Useful Life Type of Date Depreciation In Years Salvage Value Asset Acquired Cost 1/1/2002 Old Proposed Old Proposed Building 1/1/1996 $800,000 $114,000 40 50 $40,000 $70,000 Warehouse 1/1/1999 100,000 11,400 25 20 5,000 3,600 How would calculate the revised annual depreciation as

    Depreciation

    Utley Company purchased a new piece of equipment on July 1, 2003 at a cost of $300,000. The equipment has an estimated useful life of 5 years and an estimated salvage value of $25,000. The current year end is 12/31/04. Utley records depreciation to the nearest month. a. What is straight-line depreciation for 2004? b. What i

    11:11. (Depreciation-Change in Estimate)

    11. (Depreciation-Change in Estimate) Machinery purchased for $60,000 by Joe Montana Co. in 2000 was originally estimated to have a life of 8 years with a salvage value of $4,000 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2005, it is determined that the total estimated life (including

    11-4: Depreciation Computations

    Please check for corrections 4. (Depreciation Computations-Five Methods) Jon Seceda Furnace Corp. purchased machinery for $315,000 on May 1, 2004. It is estimated that it will have a useful life of 10 years, scrap value of $15,000, production of 240,000 units, and working hours of 25,000. During 2005 Seceda Corp. uses the

    Depreciation Schedules

    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. For this assignment you are to complete the following tasks: 1. Prepare two different depreciation schedules for the equipment - one using the double-declining balance

    Discussion questions

    Explain how depreciation generates actual cash flows for the company. In addition, what is the difference between accumulated depreciation and depreciation expense? How are they related? (Please reply in your own words if possible, thanks)

    Depreciation Calculation for Waterfront Transportation

    I understand that straight line depreciation method is cost minus salvage divided by years and that double declining depreciation is multiplying the decreasing book value 2 times but i cannot figure out units of activity and I need help (an explanation in english so I can understand). (See attached file for full problem descr

    Depreciation

    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

    Recording transactions and computing annual depreciation

    A. Record the following transactions on the books of Essex Co. (a) On July 1, Essex Co. sold merchandise on account to Harrard Inc. for $16,000, terms 2/10, n/30. (b) On July 8, Harrard Inc. returned merchandise worth $3,800 to Essex Co. (c) On July 11, Harrard Inc. paid for the merchandise. B. Graig Mabasa Company acq

    Depreciation Methods

    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. - Prepare 2 different depreciation schedules for the equipment - one using the double declining method, and the other using the straight line method (round to the nearest d

    Depreciation Calculation Methods for Kleener Co.

    Kleener Co. acquired a new delivery truck at the beginning of its current fiscal year. The truck cost $26,000 and has an estimated useful life of four years and an estimated salvage value of $4,000. Required: a. Calculate depreciation expense for each year of the truck's life using: 1. Straight-line depreciation. 2. Sum-of