Assume that Bloomer Company purchased a new machine on January 1, 2017, for $80,000. The machine has
Question:
Assume that Bloomer Company purchased a new machine on January 1, 2017, for $80,000. The machine has an estimated useful life of nine years and a residual value of $8,000. Bloomer has chosen to use the straight-line method of depreciation. On January 1, 2019, Bloomer discovered that the machine would not be useful beyond December 31, 2022, and estimated its value at that time to be $2,000.
Required
1. Calculate the depreciation expense, accumulated depreciation, and book value of the asset for each year 2017 to 2022.
2. Was the depreciation recorded wrong in 2017 and 2018? If so, why was it not corrected?
Step by Step Answer:
1 Depreciation accumulated depreciation and book value for the straightline method should be as foll...View the full answer
Using Financial Accounting Information The Alternative to Debits and Credits
ISBN: 978-1337491471
10th edition
Authors: Gary A. Porter, Curtis L. Norton
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
-
Teague Company purchased a new machine on January 1, 2012, at a cost of $150,000. The machine is expected to have an eight-year life and a $15,000 salvage value . The machine is expected to produce...
-
Kelm Company purchased a new machine on October 1, 2010, at a cost of $120,000.The company estimated that the machine will have a salvage value of $12,000. The machine is expected to be used for...
-
Deskin Company purchased a new machine to be used in its operations. The new machine was delivered by the supplier, installed by Deskin, and placed into operation. It was purchased under a long-term...
-
Solutions to which of the following categories of modeling techniques indicate a course of action to the decision maker? Group of answer choices Preventive models Predictive models Descriptive models...
-
Mattel, Inc., designs, manufactures, and markets toy products worldwide. Mattels toys include Barbie fashion dolls and accessories, Hot Wheels, and Fisher-Price brands. For a recent year, Mattel...
-
In Exercises 1 through 20, compute all first-order partial derivatives of the given function. f(x, y) e -x 12
-
A hydraulic engineer wants to analyze steady flow in a rectangular channel featuring a hydraulic jump immediately downstream from a sluice gate that is open to a vertical clearance of \(3...
-
Horace Culpepper, CPA, was retained by Pulsar Cable to prepare financial statements for April 2020. Horace accumulated all the ledger balances per Pulsars records and found the following. Horace...
-
Write a C program that uses the random number generator rand( ) to create an array with 20 numbers in the range from 1 to 50 and disply them in a row. The program sorts the array elements and...
-
Revise the following sentences to avoid confusing jargon, slang, clichés, and wordiness. 1. Our manager insists that we must think outside the box in promoting our new kitchen tool. 2....
-
Koffman's Warehouse purchased a forklift on January 1, 2017, for $6,000. The forklift is expected to last for five years and have a residual value of $600. Koffman's uses the double declining-balance...
-
Assume that Gonzalez Company purchased an asset on January 1, 2015, for $60,000. The asset had an estimated life of six years and an estimated residual value of $6,000. The company used the...
-
What is the p-value if, in a two-tail hypothesis test, Z STAT = +2.00?
-
2. In a city, the temperatures at midnight over the last 5 days were 3.5C, 2C, -6C, -1.5C and 0C. What was the difference between the highest temperature and the lowest temperature at midnight (a) in...
-
Discuss the simplex procedure for solving a linear programming problem Explain sensitivity analysis for a linear programming problem What is meant by optimum dual solution? State the algorithm for...
-
On October 1, 2024, Arthur, Brian, and Cameron formed the A, B and C partnership. Arthur contributed $21,000; Brian, $34,000; and Cameron, $45,000. Arthur will manage the store; Brian will work in...
-
Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2022. In the process of setting up the business, Karane has acquired various types of assets. Below...
-
Fill out the working capital analysis for Home Depot (adequacy of amounts of working capital, cash conversion cycle, and financing strategy). Remember, working capital is current assets and is not to...
-
Estimate the energy used for space and water heating in your home. How feasible would it be to get all of this energy from simple low temperature solar thermal collectors?
-
The slopes of the tangents at the points where the curve y = x2 - 4x intersects the X-axis is 1) 1 2) +2 3) +3 4) +4
-
Caribou Coffees Cash Flow Statement Following is the current asset and current liability portion of the balance sheet for Caribou Coffee as of December 30, 2007, and December 31, 2006: Required 1....
-
Darden Restaurants Contingent Liabilities The following excerpts are from the footnotes of Darden Restaurants financial statements of May 25, 2008: Like other restaurant companies and retail...
-
Hewlett-Packards Contingent Liability Following is an excerpt from Hewlett-Packards notes that accompanied its financial statements for the year ended October 31, 2008: Schorsch v. HP is a consumer...
-
Discuss with examples about financial innovation& how it develops banking industry?
-
Elaborate with real world examples about different financial markets that contributed towards growth of financial sector?
-
The following statement of financial position is for the partnership of Able, Brown, and Crown at November 1, 2018. Assets Liabilities Cash $ 20,000 Accounts payable $ 50,000 Other assets 180,000...
Study smarter with the SolutionInn App