Asked by Timyia Thomas on May 26, 2024
Verified
On January 1, 2010, Broadway Co.had purchased a machine for $60, 000.This machine had an estimated service life of eight years and an estimated residual value of $4, 000.It has been depreciated by the straight-line method since acquisition.On January 1, 2013, it was determined that the remaining service life for this machine was nine years and that the residual value would be $3, 000.
Required:
Record the depreciation expense for 2013.
Residual Value
The estimated value that an asset will realize upon its sale at the end of its useful life, after deducting the cost of disposal.
Service Life
The expected duration or period an asset is considered useful and productive for its intended purpose.
- Evaluate depreciation expenses by applying different calculations such as straight-line, double-declining balance, sum-of-the-years'-digits, and activity method.
Verified Answer
SS
Sukhraj SinghJun 02, 2024
Final Answer :
Depreciation Expense ($36,000∗/9)4,000 Accumulated Depreciation-Machinery 4,000∗$60,000−[($60,000−$4,000)/8](3 yr )=$39,000($39,000−$3,000)=$36,000 new depreciable base \begin{array} { l l l } \begin{array} { l } \text { Depreciation } \\\text { Expense } \\\left( \$ 36,000 ^ { * } / 9 \right)\end{array} & 4,000 & \\& \text { Accumulated Depreciation-Machinery } & 4,000 \\\\* & \$ 60,000 - [ ( \$ 60,000 - \$ 4,000 ) / 8 ] ( 3 \text { yr } ) = \$ 39,000 \\& ( \$ 39,000 - \$ 3,000 ) = \$ 36,000 \text { new depreciable base }\end{array} Depreciation Expense ($36,000∗/9)∗4,000 Accumulated Depreciation-Machinery $60,000−[($60,000−$4,000)/8](3 yr )=$39,000($39,000−$3,000)=$36,000 new depreciable base 4,000
Learning Objectives
- Evaluate depreciation expenses by applying different calculations such as straight-line, double-declining balance, sum-of-the-years'-digits, and activity method.