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On April 1, 2023, Ice Drilling Co. purchased a trencher for $125,000. The machine was expected to

Question:

On April 1, 2023, Ice Drilling Co. purchased a trencher for $125,000. The machine was expected to last five years and have a residual value of $12,500.


Required
Calculate depreciation expense for 2023 and 2024 to the nearest month, using 

(a) The straight-line method, 

(b) The double-declining-balance method. The company has a December 31 year-end.

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Year 2023 StraightLine 1250001250...View the full answer


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Related Book For  answer-question
Fundamental Accounting Principles Volume 2

Fundamental Accounting Principles Volume 2

ISBN: 9781260881332

17th Canadian Edition

Authors: Kermit D. Larson, Heidi Dieckmann, John Harris

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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

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