Roblez Corporation purchased machinery on January 1, 2010, at a cost of $250,000. The estimated useful life
Question:
Roblez Corporation purchased machinery on January 1, 2010, at a cost of $250,000. The estimated useful life of the machinery is 4 years, with an estimated residual value at the end of that period of $10,000. The company is considering different depreciation methods that could be used for financial reporting purposes.
Instructions
(a) Prepare separate depreciation schedules for the machinery using the straight-line method, and the declining-balance method using double the straight-line rate. Round to the nearest dollar.
(b) Which method would result in the higher reported 2010 income? In the highest total reported income over the 4-year period?
(c) Which method would result in the lower reported 2010 income? In the lowest total reported income over the 4-year period?
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
Financial Accounting Tools for Business Decision Making
ISBN: 978-0470239803
5th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso