Accounting Fall 2019 Group Exercise 5 Changing an asset's useful life and residual value Senodal Industries uses straight-line depreciation on all of its depreciable assets. The company records annual depreciation expense at the end of each calendar year. On January 11, 2014, the company purchased a machine costing $90,000. The machine's useful life was estimated to be 12 years with...
On January 1, 2017 National Manufacturing purchased a machine for $1,020,000 that it expected to have a useful life of six years. The company estimated that the residual value of the machine was 500,000. National Manufacturing used the machine for two years and sold it on January 1, 2019. for $320,000. As of December 31, 2018, the accumulated depreciation on...
On January 1, 2017. Worldwide Manufacturing purchased a machine for $810,000 that it expected to have a useful life of four years. The company estimated that the residual value of the machine was $50,000. Worldwide Manufacturing used the machine for two years and sold on January 1, 2010. for $350.000. As of December 31, 2018, the mounted depreciation on the...
On January 1, 2017, Sheffield Company contracts to lease
equipment for 5 years, agreeing to make a payment of $109,913 at
the beginning of each year, starting January 1, 2017. The leased
equipment is to be capitalized at $466,000. The asset is to be
amortized on a double-declining-balance basis, and the obligation
is to be reduced on an effective-interest basis....
On January 1, 2020 (the first day of its fiscal year) Stellar Ltd. acquired a patent which gave the company the right to use a production process. The process met the six criteria for capitalization as an intangible asset. Below is a listing of the events relating to the patent over the five fiscal years from 2020 through 2024: 2020:...
equipment was purchased for $86,300 on January 1, 2016.
Freight charges amounted yo $3,800 and there was a cost of $12,000
for building a foundation and installing the equipment. It is
estimated that the equipment will have $22,000 salvage value at the
end of its 5 year useful life. What is the amount of accumulated
depreciation at December 31, 2017,...
On October 1, 2021, the Allegheny Corporation purchased equipment for $123,000. The estimated service life of the equipment is 10 years and the estimated residual value is $2,000. The equipment is expected to produce 220,000 units during its life. Required: Calculate depreciation for 2021 and 2022 using each of the following methods. Partial-year depreciation is calculated based on the number...
Imporia Container Ltd. is suffering from declining sales of its main product, non-biodegradable plastic cartons. The president, Benny Benson, instructs his controller, Yeoh Siew Hoon, to change estimates relating to a processing line of automated plastic extruding equipment, purchased for $3 million in January 2016. The equipment was originally estimated to have a useful life of five years and a...
On March 31, 2021, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total purchase price of $1,020,000 to the various types of assets along with estimated useful lives and residual values are as follows: Estimated Useful Life (in years) N/A Asset Land Building Equipment Vehicles Total 25 Estimated Residual Value N/A none 12%...
Burnt Red Company Balance Sheet December 31, 20Y2 Assets Total current assets $350,000 Replacement Cost Accumulated Depreciation Book Value Property, plant, and equipment: Land $250,000 $50,000 $200,000 Buildings 450,000 160,000 290,000 Factory equipment 375,000 140,000 235,000 Office equipment 125,000 60,000 65,000 Patents 90,000 Goodwill 60,000 10,000 50,000 Total property, plant, and equipment $1,350,000 $420,000 $930,000 1. Fixed assets should be...