Question
In: Accounting
On June 1, 2018, XYZ Company paid $150,000 to purchase some equipment. The equipment was assigned...
On June 1, 2018, XYZ Company paid $150,000 to
purchase some equipment.
The equipment was assigned a useful life of 20 years and was to
be
depreciated using the straight-line
method.
On October 31, 2022, XYZ Company sold the
equipment for $102,970 cash.
XYZ Company recorded a loss on the sale equal to $14,965.
Calculate the residual value that was assigned to
the equipment.
Solutions
Expert Solution
|
Purchase on 1 June 2018 |
150000 |
|
Useful life |
20 year |
|
Sold on 31 October 2022 |
102970 |
|
Loss on equipment |
14965 |
|
Book value on 31 October 20122 |
|
|
Sold value on 31 October 2022 |
102970 |
|
Loss on equipment |
14965 |
|
Book value on 31 October 2022 |
117935 |
|
Depreciation month calculation during 1 June 2018 to 131 October 2022 |
|
|
1 June 2018 to 31 Dec 2018 |
7 month |
|
1 January 2019 to 31 December 2019 |
12 month |
|
1 January 2020 to 31 December 2020 |
12 month |
|
1 January 2021 to 31 December 2021 |
12 month |
|
1 January 2022 to 31 October 2022 |
10 month |
|
Total depreciation month |
53 month |
|
Total month of depreciation |
20*12 month |
240 |
|
Total depreciation charge up to 31 October 2022 |
|
|
Purchase on 1 June 2018 |
150000 |
|
Less: book value on 31 October 20122 |
117935 |
|
Total depreciation charge up to 31 Oct 2022 |
32065 |
|
Total depreciation on equipment |
32065*(240/53) |
145200 |
|
Residual value |
Book value- total depreciation |
150000-145200 |
4800 |
ekkarill92 answered 2 years agoRelated Solutions
On June 1, 2016, XYZ Company paid $375,000 to purchase land, a building, and some equipment....
On June 1, 2016, XYZ Company paid $375,000 to purchase land, a building,
and some equipment. The market value of these assets on that date were:
land $68,000; building $220,000; equipment $112,000. The equipment was
assigned a useful life of 15 years and a $6,000 residual value. The
equipment will be depreciated using the straight-line method.
On November 30, 2023, XYZ Company sold the equipment for $39,300 cash.
Calculate the amount of the loss recorded on the sale of the...
On June 1, 2016, XYZ Company paid $375,000 to purchase land, a building, and some equipment....
On June 1, 2016, XYZ Company paid $375,000 to purchase land, a building,
and some equipment. The market value of these assets on that date were:
land $68,000; building $220,000; equipment $112,000. The equipment was
assigned a useful life of 15 years and a $6,000 residual value. The
equipment will be depreciated using the straight-line method.
On November 30, 2023, XYZ Company sold the equipment for $39,300 cash.
Calculate the amount of the loss recorded on the sale of the...
On January 1, 2018, XYZ Company paid $380,000 to purchase land, building, and equipment. The market...
On January 1, 2018, XYZ Company paid $380,000 to purchase land,
building, and equipment. The market values of these assets on that
date were: land $60,000; building $200,000; equipment $140,000.
Before the property could be used, XYZ Company had to spend $5,000
to put the equipment in working order. The building was assigned a
useful life of 20 years with a $4,000 salvage value. The building
will be depreciated using the straight-line method. On October 1,
2028, XYZ Company sold...
On January 1, 2018, Harlow Company paid $156,000 to purchase a piece of equipment. Before the...
On January 1, 2018, Harlow Company paid $156,000 to purchase a piece of
equipment. Before the equipment could be used, Harlow had to spend $6,000
to put the equipment in working order.
The equipment was assigned a useful life of 12 years and a salvage value
of $9,000. The straight-line method will be used to record depreciation
on the equipment.
On January 1, 2025, Harlow Company decided the life of the equipment should
be revised from 12 to 15 years...
On January 1, 2018, Harlow Company paid $156,000 to purchase a piece of equipment. Before the...
On January 1, 2018, Harlow Company paid $156,000 to purchase a piece of
equipment. Before the equipment could be used, Harlow had to spend $6,000
to put the equipment in working order.
The equipment was assigned a useful life of 12 years and a salvage value
of $9,000. The straight-line method will be used to record depreciation
on the equipment.
On January 1, 2025, Harlow Company decided the life of the equipment should
be revised from 12 to 15 years...
1. Your company is analyzing the possible purchase of new equipment at a cost of $150,000....
1. Your company is analyzing the possible purchase of new
equipment at a cost of $150,000. Assume straight-line depreciation
and a 3-year depreciable life. It is estimated the equipment would
save:$120,000 in Year 1$120,000 in Year 2$120,000 in Year 3$120,000
in Year 4Project operating costs are expected to be $40,000 each
year. The firm’s income tax rate is 21 percent, and its required
rate of return or cost of capital is 12 percent. Calculate the Net
Present Value (NPV) of...
The XYZ Company is evaluating the acquisition of new equipment. The equipment’s base price is $150,000,...
The XYZ Company is evaluating the acquisition of new equipment.
The equipment’s base price is $150,000, and it would cost another
$16,000 to modify it for special use by the firm. The equipment
falls into the MACRS 3-year class (33% depreciation in year 1, 45%
in year 2, 15% in year 3, and 7% in year 4), and it would be sold
after 3 years for $75,000. The equipment will require an increase
in net working capital of $7,500. The...
ABC Company sold equipment on October 1, 2018, to XYZ Company for £1,000,000. It agrees to...
ABC Company sold equipment on October 1, 2018, to XYZ Company
for £1,000,000. It agrees to repurchase this equipment in July
2019, for a price of £1,100,000. The proper accounting treatment
for this transaction based on
Select one:
a. relevance
b. going concern
c. comparability
d. substance over form
On January 1, 2018, Betty DeRose, Inc. purchased equipment for $95,000. The equipment was assigned an...
On January 1, 2018, Betty DeRose, Inc. purchased equipment for
$95,000. The equipment
was assigned an estimated life of 15 years and a salvage value of
$12,500. On
January 1, 2021, Betty DeRose decided the life of the equipment
should be changed from
15 to 25 years with a salvage value of $5,900 at the end of the 25
years. Betty DeRose
uses the straight-line method to depreciate its
assets.
Calculate the book value of the equipment at December
31,...
A company is considering the purchase of some equipment. The equipment costs $1,600,000. It lasts for...
A company is considering the purchase of some equipment. The
equipment costs $1,600,000. It lasts for 4 years, and would be
depreciated straight line to a zero salvage value. Alternatively,
the company could lease the equipment for 4 years. The leasing
contract would include maintenance, and the lease payments would be
due at the end of each of the four years. The company’s before-tax
cost of debt is 10%. The tax rate is 40%. What is the breakeven
lease payment...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Can you explain to me the differnces in how we paid for the health care (access...
- Discuss proactive and defensive marketing in context to the company position in the hypothetical market structure...
- Write a java code that could be used to show the simulation of a tornado. use...
- A Canadian company issues an 8-year term bond with face value of $1,000 and 6% coupon...
- 1. Consider the following nuclides: &
- In general, teams can be described three ways. Name and define each.
- JAVASCRIPT: Please create an array of student names and another array of student grades. - Create...
ADVERTISEMENT