On October 1, 2022, Pharoah Company places a new asset into service. The cost of the...

On October 1, 2022, Pharoah Company places a new asset into service. The cost of the asset is $96500 with an estimated 5-year life and $21500 salvage value at the end of its useful life. What is the depreciation expense for 2022 if Pharoah Company uses the straight-line method of depreciation?

$4825.

$3750.

$19300.

$9650.

Expert Solution

Working

A	Cost	$ 96,500.00
B	Residual Value	$ 21,500.00
C=A - B	Depreciable base	$ 75,000.00
D	Life [in years]	5
E=C/D	Annual SLM depreciation	$ 15,000.00

>No of months the machine was used in 2022 = 3 months (Oct, Nov and Dec)

Depreciation expense of 2022 = $ 15000 x 3 / 12 = $ 3750
Correct Answer = Option #2: $ 3750

ekkarill92 answered 2 years ago

Cullumber Company purchased a new machine on October 1, 2022, at a cost of $66,000. The...

Cullumber Company purchased a new machine on October 1, 2022, at a cost of $66,000. The company estimated that the machine has a salvage value of $7,140. The machine is expected to be used for 72,000 working hours during its 6-year life. Compute the depreciation expense under the straight-line method for 2022 and 2023, assuming a December 31 year-end. (Round answers to 2 decimal places, e.g. 5,275.25.) 2022 2023 The depreciation expense under the straight-line method $Enter a dollar amount...

A plant asset acquired on October 1, 2022 at a cost of $800,000 has an estimated...

A plant asset acquired on October 1, 2022 at a cost of $800,000 has an estimated useful life of 10 years. The salvage value is estimated to be $50,000 at the end of the asset's useful life. Instructions Determine the depreciation expense for the first two years using the: (a) straight-line method. (b) double-declining-balance method.

80. On November 1, 2016, Carla Vista Co. places a new asset into service. The cost...

80. On November 1, 2016, Carla Vista Co. places a new asset into service. The cost of the asset is $77000 with an estimated 10-year life and $7000 salvage value at the end of its useful life. What is the depreciation expense for 2017 if Carla Vista Co. uses the straight-line method of depreciation? $1167. $1750. $7000. $3850. 81. Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $55000. If the balance of the Allowance for...

Sandhill Co. purchased a new machine on October 1, 2022, at a cost of $88,100. The company estimated that the machine h...

Sandhill Co. purchased a new machine on October 1, 2022, at a cost of $88,100. The company estimated that the machine has a salvage value of $5,700. The machine is expected to be used for 80,000 working hours during its 10-year life. Compute depreciation using the following methods in the year indicated. Declining-balance using double the straight-line rate for 2022 and 2023. 2022 2023 Depreciation using the Declining-balance method $ Calculate the depreciation cost per hour. (Round answer to 2 decimal places, e.g....

Ivanhoe Company purchased a new machine on October 1, 2017, at a cost of $ 87,800....

Ivanhoe Company purchased a new machine on October 1, 2017, at a cost of $ 87,800. The company estimated that the machine has a salvage value of $ 8,800. The machine is expected to be used for 64,200 working hours during its 8-year life. Compute depreciation using the following methods in the year indicated. Declining-balance using double the straight-line rate for 2017 and 2018. (Round answers to 0 decimal places, e.g. 125) 2017 2018 Depreciation using the Declining-balance method $ enter a...

Jensen Company purchased a new machine on October 1, 2017, at a cost of $104,000. The...

Jensen Company purchased a new machine on October 1, 2017, at a cost of $104,000. The company estimated that the machine has a salvage value of $8,000. The machine is expected to be used for 80,000 working hours during its 8-year life. Instructions Compute depreciation using the following methods in the year indicated. (a) Straight-line for 2017 and 2018, assuming a December 31 year-end. (b) Declining-balance using double the straight-line rate for 2017 and 2018. (c) Units-of-activity for 2017, assuming...

138. Beckman Enterprises purchased a depreciable asset on October 1, Year 1 at a cost of...

138. Beckman Enterprises purchased a depreciable asset on October 1, Year 1 at a cost of $156,000. The asset is expected to have a salvage value of $16,400 at the end of its five-year useful life. If the asset is depreciated on the double-declining-balance method, the asset's book value on December 31, Year 2 will be: 142. A total asset turnover ratio of 3.6 indicates that: Multiple Choice A. For every $1 in assets, the firm paid $3.6 in expenses...

Pharoah Leasing Company leases a new machine to Sharrer Corporation. The machine has a cost of...

Pharoah Leasing Company leases a new machine to Sharrer Corporation. The machine has a cost of $65,000 and fair value of $93,000. Under the 3-year, non-cancelable contract, Sharrer will receive title to the machine at the end of the lease. The machine has a 3-year useful life and no residual value. The lease was signed on January 1, 2020. Pharoah expects to earn an 8% return on its investment, and this implicit rate is known by Sharrer. The annual rentals...

C.S. Pharoah Company had the following transactions involving notes payable. July 1, 2022 Borrows $47,000 from...

C.S. Pharoah Company had the following transactions involving notes payable. July 1, 2022 Borrows $47,000 from First National Bank by signing a 9-month, 8% note. Nov. 1, 2022 Borrows $50,000 from Lyon County State Bank by signing a 3-month, 6% note. Dec. 31, 2022 Prepares adjusting entries. Feb. 1, 2023 Pays principal and interest to Lyon County State Bank. Apr. 1, 2023 Pays principal and interest to First National Bank. Prepare journal entries for each of the transactions. (Credit account...

On July 31, 2022, Pharoah Company had a cash balance per books of $6,320.00. The statement...

On July 31, 2022, Pharoah Company had a cash balance per books of $6,320.00. The statement from Dakota State Bank on that date showed a balance of $7.870.80. A comparison of the bank statement with the Cash account revealed the following facts. 1. The bank service charge for July was $21.00. 2. The bank collected $1,700.00 from a customer for Pharoah Company through electronic funds transfer. 3. The July 31 receipts of $1,377.30 were not included in the bank deposits for July. These...

Question