Question
In: Accounting
Sandhill Limited purchased a machine on account on April 2, 2018, at an invoice price of...
Sandhill Limited purchased a machine on account on April 2, 2018,
at an invoice price of $332,220. On April 4, it paid $2,170 for
delivery of the machine. A one-year, $3,960 insurance policy on the
machine was purchased on April 5. On April 18, Sandhill paid $7,840
for installation and testing of the machine. The machine was ready
for use on April 30.
Sandhill estimates the machine’s useful life will be five years
or 6,153 units with a residual value of $77,180. Assume the machine
produces the following numbers of units each year: 953 units in
2018; 1,483 units in 2019; 1,279 units in 2020; 1,390 units in
2021; and 1,048 units in 2022. Sandhill has a December 31 year
end.
(1) Straight-line method
(2) Double-diminishing-balance method
(3) Units-of-production method
Which method causes net income to be lower in the early years of
the asset’s life?
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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for installation and testing of the machine. The machine was ready
for use on April 30. Crane estimates the machine’s useful life will
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please answer all Crane Limited purchased a machine on account on April 2, 2018, at an...
please answer all
Crane Limited purchased a machine on account on April 2, 2018,
at an invoice price of $360,090. On April 4, it paid $1,850 for
delivery of the machine. A one-year, $4,250 insurance policy on the
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Crane estimates the machine’s useful life will be five years or
6,018 units with...
Glans Company purchased equipment on account on April 6, 2012, at an invoice price of $442,000....
Glans Company purchased equipment on account on April 6, 2012,
at an invoice price of
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equipment. A one-year, $3,000
insurance policy on the equipment was purchased on April 9, 2012.
On April 22, 2012, Glans
paid $6,000 for the installation and testing of the equipment. The
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Glans estimates that the equipment’s useful life will be four
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Question 2 (20 marks) KOL Limited purchased a machine on 1 January 2018 at $500,000. It...
Question 2
KOL Limited purchased a machine on 1 January 2018 at $500,000.
It has an expected useful life of 5 years and an estimated salvage
value of $50,000. It is also expected that the machine can run for
30,000 hours. For the year ended 31 December 2018, KOL has used the
machine for 4,000 hours.
KOL has another equipment with the following data on 31 December
2018.
Required:
e. Discuss when a company should perform an impairment review
for...
Question 2 (20 marks) KOL Limited purchased a machine on 1 January 2018 at $500,000. It...
Question 2
KOL Limited purchased a machine on 1 January 2018 at $500,000.
It has an expected useful life of 5 years and an estimated salvage
value of $50,000. It is also expected that the machine can run for
30,000 hours. For the year ended 31 December 2018, KOL has used the
machine for 4,000 hours.
KOL has another equipment with the following data on 31 December
2018.
Cost $260,000
Carrying amount $200,000
Fair value less costs to sell $180,000...
Aurora Company is considering the purchase of a new machine. The invoice price of the machine...
Aurora Company is considering the purchase of a new machine. The
invoice price of the machine is $123,000, freight charges are
estimated to be $4,000, and installation costs are expected to be
$5,000. Salvage value of the new equipment is expected to be zero
after a useful life of 5 years. Existing equipment could be
retained and used for an additional 5 years if the new machine is
not purchased. At that time, the salvage value of the equipment
would...
KOL Limited purchased a machine on 1 January 2018 at $500,000. It has an expected useful...
KOL Limited purchased a machine on 1 January 2018 at $500,000.
It has an expected useful life of 5 years and an estimated salvage
value of $50,000.
It is also expected that the machine can run for 30,000 hours. For
the year ended 31 December 2018, KOL has used the machine for 4,000
hours.
KOL has another equipment with the following data on 31 December
2018.
Cost $260,000
Carrying amount $200,000
Fair value less costs to sell $180,000
Value-in-use $175,000...
A machine was purchased on 2 January 2018 for $70 000, net of GST. The machine...
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sum-of-the-years'-digits method and rounding to the nearest dollar,
depreciation expense for the year ended 31 December 2019, is:
$13 810.
$16 667.
$16 571.
$20 000.
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ACY Limited (“ACY”) purchased a specialized machine for its business use for a total price of...
ACY Limited (“ACY”) purchased a specialized machine for
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Merchandise with an invoice price of $3,600 was purchased on February 3, terms 2/15, n/60. The...
Merchandise with an invoice price of $3,600 was purchased on
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record purchases and a perpetual inventory system. The entry to
record a cash payment of this purchase obligation on February 17
is:
Debit Accounts Payable $3,528; credit Cash $3,528.
Debit Accounts Payable $3,600; credit Cash $3,600.
Debit Accounts Payable $3,528; debit Discounts Lost $72; credit
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Debit Accounts Payable $3,600; credit Merchandise Inventory $72;
credit Cash $3,528....
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