Assume that Alpha Communications paid $75,000 for equipment with a 15-year life and zero expected residual value.
Question:
Assume that Alpha Communications paid $75,000 for equipment with a 15-year life and zero expected residual value. After using the equipment for six years, the company determines that the asset will remain useful for only five more years.
Requirements
1. Record depreciation on the equipment for year 7 by the straight-line method.
2. What is accumulated depreciation at the end of year 7?
Step by Step Answer:
Req 1 Journal Entry DATE ACCOUNTS AND EXPLANATIONS POST REF ...View the full answer
Financial and Managerial Accounting
ISBN: 978-0132497978
3rd Edition
Authors: Horngren, Harrison, Oliver
Related Video
In accounting terms, depreciation is defined as the reduction of the recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. An example of fixed assets are buildings, furniture, office equipment, machinery, etc. The land is the only exception that cannot be depreciated as the value of land appreciates with time. Depreciation allows a portion of the cost of a fixed asset to be the revenue generated by the fixed asset. This is mandatory under the matching principle as revenues are recorded with their associated expenses in the accounting period when the asset is in use. This helps in getting a complete picture of the revenue
Students also viewed these Accounting questions
-
Assume that Alpha Communications paid $ 75,000 for equipment with a 15-year life and zero expected residual value. After using the equipment for six years, the company determines that the asset will...
-
After taking five years straight-line depreciation expense for an asset that was expected to have an eight-year useful life, a company decided that the asset would last another six years. Is this...
-
A company purchased an equipment system for $325,000 on January 2. The company expects the equipment to last for eight years or 60,000 hours of operation, with an estimated salvage value of $25,000....
-
SUBJECT 3 (2.5 UNITS)The company "APOLLON" has calculated that for the production of oneunitof finished product requires standards of 8 kg of direct materials(AU) and thestandard price was set at 2...
-
Cruise Canada Motorhomes Inc. (CCM) was formed on January 1, 2017, when the company issued its common shares for $200,000. Early in January, CCM made the following cash payments: a. For showroom...
-
Draw the hierarchy chart and design the logic for a program that calculates the projected cost of a remodeling project. Assume that the labor cost is $30 per hour. Design a program that prompts the...
-
The soft-ride suspension system of the mountain bike is pinned at C and supported by the shock absorber BD. If it is designed to support a load P = 1500 N, determine the required minimum diameter of...
-
Mill Creek Golf Club purchased equipment on January 1, 2016, for $31,500. Suppose Mill Creek Golf Club sold the equipment for $22,000 on December 31, 2018. Accumulated Depreciation as of December 31,...
-
Calculate the moment of inertia of a disk and ring. Given: Mass of disk = 114 gram, Radius of Disk = 3.3 cm, Mass of Ring = 467 gram, Inner Radius of Ring = 4 cm, outer radius of Ring = Inner radius...
-
Columbia Sportswear is one of the largest outdoor apparel, footwear, accessories, and equipment companies in the world. Examine the following balance sheet values, which are slightly revised from...
-
On July 31, 2012, Logan Services purchased a Xerox copy machine for $40,400. Logan Services expects the machine to last for four years and to have a residual value of $2,000. Requirement 1. Compute...
-
Global Positioning Net purchased equipment on January 1, 2012, for $36,000. Global Positioning Net expected the equipment to last for four years and to have a residual value of $4,000. Suppose Global...
-
Nelson next considered the sample size needed for a selection of customers accounts receivable for the substantive audit of the total accounts receivable. He presented the following information for...
-
1. In your opinion, which of the Seven Myths of social media is most believed by people and why? Explain your reasons. 2. Which of the Listen and Observe Stages do you think is the most difficult to...
-
The demand for one of the major products for a company sustained large and continuing declines. As a result, the company performed an asset impairment test on the fixed assets that were associated...
-
Momentum Objective To investigate the Law of Conservation of Momentum by analyzing one-dimensional elastic and inelastic collisions. Introduction Momentum is a vector property of all moving bodies....
-
Whitney received $ 7 6 , 1 0 0 of taxable income in 2 0 2 3 . All of the income was salary from her employer. What is her income tax liability in each of the following alternative situations?
-
1. Which company presents the most compelling "paid" advertising, in your opinion? Why? 2. Choose the same social media platform for both companies (e.g. Facebook) and then decide which company makes...
-
The balance sheet information at the end of 20X1 and 20X2 for the Wentworth Catering Business is as follows. Required: Fill in the letters (a)-(f). All the necessary information is given. (Hint: It...
-
Huntingdon Capital Corp. is a competitor of Plazacorp and First Capital Realty. Huntingdon reported the following selected information (in millions):...
-
Comparative morphology _______. a. Is based mainly on the fossil record b. Shows evidence of divergences and convergences in body parts among certain major groups c. Compares the proteins and the DNA...
-
Brandon Inc. reported the following items in its balance sheet and income statement: net income, $85,600; gain on sale of equipment, $12,800; increase in accounts receivable, $15,400; decrease in...
-
Davis Inc. reported the following information for equipment: In addition, Davis sold equipment costing $10,000 with accumulated depreciation of $8,000 for $2,200 cash, producing a $200 gain. Davis...
-
Hebert Company reported the following information for 2009: Repaid long-term debt ........... $30,000 Paid interest on note payable ........ 1,200 Issued common stock ........... 50,000 Paid...
-
5. Recursive method; what is printed if we call mystery (6, 12); public static void mystery (int x, int y) { if (x > y) { System.out.print ("/"); else if (x = y) { } else { System.out.print ("=" + y...
-
Simmonds Products has spent $158,500 (sunk cost) on research to develop low-fat imitation wine. The firm is planning to spend $210,000 on a machine to produce new wine. Shipping cost of $60,000 and...
-
In particular, you were introduced to three decision-making techniques -- majority rule, minority rule by authority or expertise, and consensus rule -- each with their own pros and cons. Using these...
Study smarter with the SolutionInn App