On May 10, 2010, the Horan Company purchased equipment for $25,000. The equipment has an estimated service
Question:
On May 10, 2010, the Horan Company purchased equipment for $25,000. The equipment has an estimated service life of five years and zero residual value. Assume that straight-line depreciation is used.
Required
Compute the depreciation for 2010 for each of the following four alternatives:
1. The company computes depreciation to the nearest day. (Use 12 months of 30 days each.)
2. The company computes depreciation to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month.
3. The company computes depreciation to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year.
4. The company records one-half year’s depreciation on all assets purchased during the year.
Step by Step Answer:
1 2 3 4 To nearest day Days in year Days in life of asset Dep...View the full answer
Intermediate Accounting
ISBN: 978-0324659139
11th edition
Authors: Loren A. Nikolai, John D. Bazley, Jefferson P. Jones
Students also viewed these Accounting questions
-
On May 10, 2007, the Horan Company purchased equipment for $25,000. The equipment has an estimated service life of five years and zero residual value. Assume that straight-line depreciation is used....
-
On July 1, 2016, Silver Stone Company purchased equipment for a cost of $450,000 with an expected useful life of 10 years and an anticipated residual value of $30,000. For the year 2017 (the second...
-
On July 1, 2011, Silver Stone Company purchased equipment for a cost of $450,000 with an expected useful life to 15 years and an anticipated residual value of $30,000. This is the company's only...
-
Preparing and interpreting a statement of cash flows using a T-account work sheet. Financial statement data for Dickerson Manufacturing Company for the current year appear in Exhibit 5.29. Additional...
-
The choice between print and broadcast media is often portrayed as a choice between high- and low-involvement media. What makes one medium inherently more involving than another? How will the...
-
a. Discuss the role of Bank Supervision. b. Outline the selected Core Principles for Effective Banking Supervision. c. Discuss how to assess the effectiveness of supervision d. Evaluate the...
-
What are the basic elements of a use case diagram?
-
Svedin Incorporated provides the following information relating to 2011: Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $17,650...
-
What is the current Remote Access Protocol used in Windows 2012? Explain.
-
A project consists of three tasks: A, B, and C. Task A is known to take five days for sure. Tasks B and C are each dependent on A. B takes five days. C takes seven days with a probability of 0.5 and...
-
On January 2, 2010, Lapar Corporation purchased a machine for $50,000. Lapar paid shipping expenses of $500, as well as installation costs of $1,200. The company estimated that the machine would have...
-
On January 1, 2006, the Vallahara Company purchased machinery for $650,000 which it installed in a rented factory. It is depreciating the machinery over 12 years by the straight-line method to a...
-
What aspect of physics was not known by the writer of this newspaper editorial that ridiculed early experiments by Robert H. Goddard on rocket propulsion above Earth's atmosphere? "Professor Goddard...
-
Bedard Corporation reported net income of 300,000 in 2015 and had 200,000 ordinary shares outstanding throughout the year. Also outstanding all year were 45,000 options to purchase ordinary shares at...
-
The following situations relate to Bolivia Company. 1. Bolivia provides a warranty with all products sold. It estimates that it will sell 1,000,000 units of its product for the year ended December...
-
Arantxa Corporation has outstanding 20,000 shares of R\($5\) par value ordinary shares. On August 1, 2015, Arantxa reacquired 200 shares at R\($80\) per share. On November 1, Arantxa reissued the 200...
-
Organic Growth Company is presently testing a number of new agricultural seeds that it has recently harvested. To stimulate interest, it has decided to grant to five of its largest customers the...
-
Use the information presented for Ottawa Corporation in BE10-15, but assume the machinery is sold for \($5\),200 instead of \($10\),500. Prepare journal entries to (a) update depreciation for 2016...
-
On August 1, 2006, Zimbabwe changed the value of the Zim dollar from Z$101/U.S.$ to Z$250/U.S.$. a. What was the original U.S. dollar value of the Zim dollar? What is the new U.S. dollar value of the...
-
The following information is for Montreal Gloves Inc. for the year 2020: Manufacturing costs Number of gloves manufactured Beginning inventory $ 3,016,700 311,000 pairs 0 pairs Sales in 2020 were...
-
In the nation of Wiknam, people hold $1,000 of currency and $4,000 of demand deposits in the only bank, Wikbank. The reservedeposit ratio is 0.25. a. What are the money supply, the monetary base, and...
-
(Deferred Taxes, Income Effects) Stephanie Delaney, CPA, is the newly hired director of corporate taxation for Acme Incorporated, which is a publicly traded corporation. Ms. Delaneys first job with...
-
(Deferred Taxes, Income Effects) Stephanie Delaney, CPA, is the newly hired director of corporate taxation for Acme Incorporated, which is a publicly traded corporation. Ms. Delaneys first job with...
-
Refer to P&Gs financial statements and the accompanying notes to answer the following questions. (a) What amounts relative to income taxes does P&G report in its: (1) 2007 income statement? (2) June...
-
A taxpayer pays for two people to work for him on a contract basis during the year. The first only works for a few days and is paid a total of $200. The second works for a few months and makes...
-
Dennis buys a house in 1973 and finances it with a mortgage that carries an annual interest rate of 7 per cent. Inflation in 1973 is 3 per cent, inflation in 1974 is 4 per cent, and inflation in 1975...
-
1. Consider the continuous function x+10 if x 0 f(x)=x if 0 5 a) Write an R function which takes a single argument x. The function should return the vector of values of the function f(x) evaluated at...
Study smarter with the SolutionInn App