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In: Accounting

1. Holmes Packaging sold a machine for $49,500. The company bought this machine for $120,000 seven...

1. Holmes Packaging sold a machine for $49,500. The company bought this machine for $120,000 seven years ago and was depreciating it on a straight-line basis over ten years to a $12,000 salvage value. What is the gain (loss) that Holmes Packaging should report?

2. Vermont Industries, a clothing mail-order retailer, purchased a new industrial sewing machine for $156,000. This machine is expected to operate for 5 years after which it will be sold for salvage value estimated to be $9,000. What is the yearly depreciation expense under the straight-line method?

3. Perfect Pastries buys a display case for her bakery business on January 1, 2019. The case cost $36,000 and is expected to be used for ten years. At the end of the ten years it is expected that the case can be sold for $4,000. Compute the depreciation expense for the third year (2021) using both straight-line and double-declining balance depreciation methods.

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ekkarill92 answered 1 year ago
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