Question
In: Accounting
Hoover Corporation purchased equipment on January 1, 2019, for $610,000. In 2019 and 2020, Hoover depreciated...
Hoover Corporation purchased equipment on January 1, 2019, for $610,000. In 2019 and 2020, Hoover depreciated the asset on a straight-line basis with an estimated useful life of 8 years and a $10,000 residual valie. In 2021, due to changes in technology, Hoover revised the useful life to a total of four years with no residual value. What depreciation would Hoover record for the year 2021 on this equipment?
a) $98,641
b) 230,000
c)100,000
d)72,000
Solutions
Expert Solution
formula for depreciation after the change in useful life = (cost-Revised residual value-accumulated depreciation)/remaining useful life
- cost = $610,000
- revised residual value = $0
- accumulated depreciation = depreciation charged in 2019 & 2020
2019 =cost -salvage/useful life
=$610,000-10,000/8
=$75,000
2020= same $75,000
accumulated depreciation upto 2020 December= $75,000+75,000 =$150,000
- remaining useful life = revised useful life- years for which depreciation already provided
=4-2 (2019,2020)
=2
=$230,000
Thus, answer is b) $230,000
Please upvote if you find this helpful. In case of query please comment.
ekkarill92 answered 1 year agoRelated Solutions
Trainex Corporation purchased equipment on January 1, 2020 at a cost of $500,000. The equipment has...
Trainex Corporation purchased equipment on January 1, 2020 at a
cost of $500,000. The equipment has an estimated residual value of
$50,000 and an estimated life of 5 years. At the end of two years,
Trainex reevaluated the useful life of the equipment. Management
extended the total useful life an additional 5 years but estimated
that the equipment would have no residual value at the end of this
time. If the company uses straight-line depreciation, what amount
(in whole dollars)...
Trainor Corporation purchased equipment on January 1, 2020, at a cost of $500,000. The equipment has...
Trainor Corporation purchased equipment on January 1, 2020, at a
cost of $500,000. The equipment has an estimated residual value of
$50,000 and an estimated life of 5 years. At the end of two years,
Trainor revaluated the useful life of the equipment. Management
extended the total useful life an additional 5 years but estimated
that the equipment would have no residual value at the end of this
time.
If the company uses straight-line depreciation, what amount
would be recorded...
Fellingham Corporation purchased equipment on January 1, 2019, for $236,000. The company estimated the equipment would...
Fellingham Corporation purchased equipment on January 1, 2019,
for $236,000. The company estimated the equipment would have a
useful life of 10 years with a $19,200 residual value. Fellingham
uses the straight-line depreciation method. Early in 2021,
Fellingham reassessed the equipment's condition and determined that
its total useful life would be only six years in total and that it
would have no salvage value. How much would Fellingham report as
depreciation on this equipment for 2021?
Multiple Choice
$32,107.
$65,160....
13) Lorenzo Corporation purchased equipment on January 1, 2019 for $600,000. The equipment had an estimated...
13) Lorenzo Corporation purchased equipment on January 1, 2019
for $600,000. The equipment had an estimated useful life of 5 years
and an estimated salvage value of $60,000. After using the
equipment for 2 years, the company determined that the equipment
could be used for an additional 6 years and have a salvage value of
$8,000. Assuming Lorenzo Corporation uses straight-line
depreciation, compute depreciation expense for the year ending
December 31, 2021. (Round your final answer to the nearest
dollar.)...
Larkspur Company purchased a computer system for $78,300 on January 1, 2019. It was depreciated based...
Larkspur Company purchased a computer system for $78,300 on
January 1, 2019. It was depreciated based on a 8-year life and an
$17,900 salvage value. On January 1, 2021, Larkspur revised these
estimates to a total useful life of 4 years and a salvage value of
$10,200. Larkspur uses straight-line depreciation.
Prepare Larkspur’s entry to record 2021 depreciation expense.
(Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required,
select "No...
Bramble Company purchased a computer system for $73,400 on January 1, 2019. It was depreciated based...
Bramble Company purchased a computer system for $73,400 on
January 1, 2019. It was depreciated based on a 7-year life and an
$19,500 salvage value. On January 1, 2021, Bramble revised these
estimates to a total useful life of 4 years and a salvage value of
$10,500. Bramble uses straight-line depreciation.
Prepare Bramble’s entry to record 2021 depreciation expense.
(Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required,
select "No...
Marigold Company purchased a computer system for $74,750 on January 1, 2019. It was depreciated based...
Marigold Company purchased a computer system for $74,750 on January
1, 2019. It was depreciated based on a 7-year life and an $17,700
salvage value. On January 1, 2021, Marigold revised these estimates
to a total useful life of 4 years and a salvage value of $9,400.
Marigold uses straight-line depreciation.
Prepare Marigold’s entry to record 2021 depreciation expense.
(Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required,
select "No...
1. On January 1, 2019, ABC Company purchased a new piece of equipment. The equipment was...
1. On January 1, 2019, ABC Company purchased a new piece of equipment.
The equipment was assigned a $7,000 residual value and is expected
to produce a total of 60,000 units over its life. The depreciation
expense reported on the equipment for 2019 was $10,734. During 2020,
the equipment was used to produce 9,000 units. At December 31, 2020,
the book value of the equipment was $57,466. ABC Company is using the
units-of-production depreciation method to depreciate the equipment.
Calculate...
On January 1, 2019, Happy Company purchased equipment for $114,000. The equipment was assigned a useful...
On January 1, 2019, Happy Company purchased equipment for
$114,000. The equipment was assigned a useful life of 15 years and
a $6,000 residual value. Happy Company will use the straight-line
method to depreciate the equipment.
On January 1, 2023, Happy Company revised the life of the
equipment from 15 to 20 years.
On January 1, 2026, Happy Company revised the life of the
equipment from 20 to 12 years.
On January 1, 2028, Happy Company spent $58,000 to overhaul...
On January 1, 2019, Happy Company purchased equipment for $114,000. The equipment was assigned a useful...
On January 1, 2019, Happy Company purchased equipment for
$114,000. The equipment was assigned a useful life of 15 years and
a $6,000 residual value. Happy Company will use the straight-line
method to depreciate the equipment. On January 1, 2023, Happy
Company revised the life of the equipment from 15 to 20 years. On
January 1, 2026, Happy Company revised the life of the equipment
from 20 to 12 years. On January 1, 2028, Happy Company spent
$58,000 to overhaul...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Compare the MOSFET, JFET , and BJT and identify the reasons these devices behave differently. What...
- How would you use SAS Enterprise Miner to create a neural network model of your example?
- Explain the use of neural networking modeling in predictive analytics.
- Current Market Mix of Netflix, as detail as possible, please.
- This is all one question, thank you so much in advance! You must evaluate a proposal...
- X Company is considering the purchase of a new processor that costs $200,000. Shipping and setup...
- There are a large number of tasks involved in information technology and programming, and many of...
ADVERTISEMENT