Annual depreciation = ($1000000-$200,000) / 10 years
= $80,000
Net book value of the equipment at the end of 5th year = $1,000,000 - $80,000*5
= $600,000
Loss on impairment = Carrying value of the assets - recoverable value
recoverable value = Lower of the fair value and future cash flows
Loss on impairment = $600,000 - $450,000 = $150,000
Dwng Xathity Company purchased equipment for $1,000,000 and has depreciated it using the straight-line method for...
The following are some transactions of Sheridan Company for
2021. Sheridan Company uses straight-line depreciation and has a
December 31 year end.
Apr. 1
Retired a piece of equipment that was purchased on January 1,
2012, for $48,000. The equipment had an expected useful life of 10
years with no residual value.
July 30
Sold equipment for $1,300 cash. The equipment was purchased on
January 3, 2019, for $14,040 and was depreciated over an expected
useful life of three years...
stering Depreciation uses the straight-line method. Assets purchased between the 1* and 15hare depreciated for the entire month; assets purchased after the 15th as though te acquired the following month. On May 2, 20x1, ZyCo purchases for $25,000 ftrth that it expects to last for 10 years and to have a residual value of $1,000. What is balance in the accumulated depreciation account at the end of 20x37 y were furniture a. $2,400 b. $6,400 c. $7,200 d. Insufficient information...
The Bistro is planning to add a new line of noodles that will require the acquisition of new processing equipment. The equipment will cost $1,000,000, including installation and shipping. It will be depreciated straight-line to zero value over the 10-year economic life of the project. Interest cost associated with financing the equipment purchase is estimated to be $40,000 annually. The expected salvage value of the machine at the end of 10 years is $200,000. One year ago a marketing survey...
Nanki Corporation purchased equipment on January 1, 2016, for $630,000. In 2016 and 2017, Nanki depreciated the asset on a straight-line basis with an estimated useful life of eight years and a $14,000 residual value. In 2018, due to changes in technology, Nanki revised the useful life to a total of 6 years with no residual value. What depreciation would Nanki record for the year 2018 on this equipment?
. The new equipment will have a cost of $9,000,000, and it will be depreciated on a straight-line basis over a period of six years (years 1-6) The old machine is also being depreciated on a straight-line basis. It has a book value or 200,000 (at year 0) and four more years of depreciation left ($50,000 per year). . The new equipment will have a salvage value of $0 at the end of the project's life (year 6). The old...
On January 1, 2014, Borstad Company purchased equipment for $1,150,000. It is depreciating the equipment over 25 years using the straight-line method and a zero residual value. Late in 2019, because of technological changes in the industry and reduced selling prices for its products, Borstad believes that its equipment may be impaired and will have a remaining useful life of 8 years. Borstad estimates that the equipment will produce cash inflows of $450,000 and will incur cash outflows of $341,000...
Problem 4: Dolphin Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2016 for $6,000,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2017, new technology was introduced that would accelerate the obsolescence of Dolphin’s equipment. Dolphin’s controller estimates that expected future net cash flows on the equipment will be $3,750,000 and that the fair value of the equipment is $3,300,000. Dolphin intends to continue using...
Nanki Corporation purchased equipment on January 1, 2016, for $631,000. In 2016 and 2017, Nanki depreciated the asset on a straight-line basis with an estimated useful life of eight years and a $7,000 residual value. In 2018, due to changes in technology, Nanki revised the useful life to a total of 4 years with no residual value. What depreciation would Nanki record for the year 2018 on this equipment? (Round your answer to the nearest dollar amount.) Multiple Choice $104,000....
Hirsch Company acquired equipment at the beginning of 2020 at a cost of $135,900. The equipment has a six-year life with no expected salvage value and is depreciated on a straight-line basis. At December 31, 2020, Hirsch compiled the following information related to this equipment: Expected future cash flows from use of the equipment$117,200Present value of expected future cash flows from use of the equipment102,400Fair value (selling price less costs to dispose)98,300 Assume that Hirsch Company is a U.S.-based company that is issuing...
Whispering Winds Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2019 for $10,500,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2020, new technology was introduced that would accelerate the obsolescence of Whispering Winds’s equipment. Whispering Winds’s controller estimates that expected future net cash flows on the equipment will be $6,562,500 and that the fair value of the equipment is $5,775,000. Whispering Winds intends to...