Benson Company bought a machine costing $120,000 on 1 April 2015. Management estimated the useful life...

Benson Company bought a machine costing $120,000 on 1 April 2015. Management estimated the useful life to be 10 years and the residual value to be $20,000.

On 1 January 2018, management revised the useful life and residual value of the machine. The remaining useful life was revised to 5 years while the residual value was revised to $10,000.

The company’s financial year end is 31 December.

Compute the depreciation expense, accumulated depreciation and net book value of the machine for 2015, 2016, 2017 and 2018.

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

A new machine costs $120,000, has an estimated useful life of five years and an estimated...

A new machine costs $120,000, has an estimated useful life of five years and an estimated salvage value of $15,000 at the end of that time. It is expected that the machine can produce 210,000 widgets during its useful life. The New Times Company purchases this machine on January 1, 2017, and uses it for exactly three years. During these years the annual production of widgets has been 80,000, 50,000, and 30,000 units, respectively. On January 1, 2020, the machine...

Torge Company bought a machine for $62,000 cash. The estimated useful life was five years and...

Torge Company bought a machine for $62,000 cash. The estimated useful life was five years and the estimated residual value was $8,000. Assume that the estimated useful life in productive units is 174,000. Units actually produced were 46,400 in year 1 and 52,200 in year 2. Required: 1. Determine the appropriate amounts to complete the following schedule. (Do not round intermediate calculations.) 2-a. Which method would result in the lowest net income for year 1? A.Units-of-production B.Straight-line C.Double-declining-balance 2-b. Which...

ABC Co. purchased a machine on April 1, 2014 for $82,000 with an estimated useful life...

ABC Co. purchased a machine on April 1, 2014 for $82,000 with an estimated useful life of 6 years and salvage value of $4,000. They sold the machine on July 1, 2019, for $15,000. Assuming ABC Co. uses the straight line method of depreciating its assets, the journal entry to record the sale of the machine would include a: A. Debit to Loss for $1,250 B. Credit to Machine for $13,750 C. Credit to Gain for $1,250 D. Credit to Accumulated Depreciation...

On January 1, 20x1, Perdrillo Company acquired a new drilling machine costing $10,000. Estimated useful life...

On January 1, 20x1, Perdrillo Company acquired a new drilling machine costing $10,000. Estimated useful life of five years or 36,000 drilling operations and estimated salvage value of $1,000. REQUIRED: Encircle the one correct answer for each of the following: Show all supporting calculations or no credit. Using straight-line depreciation, 20x1 depreciation expense is: a. $2,000 b. $7,200 c. $1,800 d. $900 e. None of these. Using units-of-production depreciation and that 8,000 drilling operations were made during 20x1, depreciation expense...

ABC company purchased equipment on January 1, 2015, for $50,000, with an estimated useful life of...

ABC company purchased equipment on January 1, 2015, for $50,000, with an estimated useful life of 5 years and an estimated residual value of $5,000. Assume the equipment was sold on April 30th 2017 for $25,000 Prepare journal entries for the following: A) Calculate depreciation expense for 2015 and 2016 using straight line method of depreciation. Prepare the journal entry to record depreciation B) Calculate depreciation for 2017 and record the journal entry C) Prepare the journal entry for the...

Your Company purchased a machine with an estimated useful life of 8 years. The machine will...

Your Company purchased a machine with an estimated useful life of 8 years. The machine will generate cash inflows of $96,000 each year. The salvage value at the end of the project is $80,000. Your Company's discount rate is 6%. The net present value of the investment is ($7,500). What is the purchase price of the machine?

A machine was purchased on January 1 for $100,000. The machine has an estimated useful life...

A machine was purchased on January 1 for $100,000. The machine has an estimated useful life of 4 years with a salvage value of $10,000. Under the straight-line method, accumulated depreciation at the end of year 2 is:

A machine with an original cost of $120,000 and no salvage value had an estimated useful...

A machine with an original cost of $120,000 and no salvage value had an estimated useful life of 6 years, but after 2 complete years, management decided that the orignal estimate of useful life should have been 8 years. Using a T-Chart template, prepare the following entries: A. Depreciation for Year 1 B. Depreciation for Year 2 C. Depreciation for Year 3

Q2. Company ABC bought an equipment for $20,000 in 2015, with useful life of 5 years...

Q2. Company ABC bought an equipment for $20,000 in 2015, with useful life of 5 years $5,000 residual value amortized using straight-line method. Prepare a table to illustrate the differences accounting income vs taxable income caused by this equipment. Assume, this equipment was sold at the end of2017 for $11,000. Please prepare JEs for 2015, 2016 and 2017

Company ABC bought an equipment for $50,000 in 2015, with useful life of 5 years $5,000...

Company ABC bought an equipment for $50,000 in 2015, with useful life of 5 years $5,000 residual value amortized using straight-line method. a) Assume, this equipment was sold June 30th, 2016 for $40,000. Please prepare All related JEs for 2015, 2016 (tax,amortization and sale of asset)

Subjects