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# depreciation expense

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1. Jenks Co. takes a full year's depreciation expense in the year of an asset's acquisition and no depreciation expense in the year of disposition. Data relating to one of Jenks' depreciable assets at December 31, 2007 are as follows:
Acquisition year 2005
Cost \$350,000
Residual value 50,000
Accumulated depreciation 240,000
Estimated useful life 5 years
Using the same depreciation method (it is not straight line) as used in 2005, 2006, and 2007, how much depreciation expense should Jenks record in 2008 for this asset?(it is not straight line)
a. \$40,000
SYD: 15
2005: (350,000-50000)*5/15 = 100,000
2006: (350,000-50000)*4/15 = 80,000
2007: (350,000-50000)*3/15 = 60,000
2007: (350,000-50000)*2/15 = 40,000

2 . Carr Co. purchased a machine on July 1, 2009, for \$700,000. The machine has an estimated useful life of five years and a salvage value of \$140,000. The machine is being depreciated from the date of acquisition by the 150% declining-balance method. For the year ended December 31, 2009, Carr should record depreciation expense on this machine of
c. \$105,000.
700000*1/5*150%*6/12 = 105000

3. Bruman, Inc. purchased equipment in 2007 at a cost of \$1,400,000. Two years later it became apparent to Bruman, Inc. that this equipment had suffered an impairment of value. In early 2009, the book value of the asset is \$840,000 and it is estimated that the fair value is now only \$560,000. The entry to record ...

#### Solution Summary

Assess depreciation expense in this case.

\$2.19