On January 2 2011 the Jacksons Company purchased equipment to be used in its manufacturing process. The
Question:
On January 2 2011 the Jackson’s Company purchased equipment to be used in its manufacturing process. The equipment has an estimated life of eight years and an estimated residuals value of $30,625. The expenditures made to acquire the assets were as follows
On January 2 2011 the Jackson’s Company purchased equipment to be used in its manufacturing process. The equipment has an estimated life of eight years and an estimated residuals value of $30,625. The expenditures made to acquire the assets were as follows
Purchase price……………………………..$154,000
Freight charges………………………………...2,000
Installation charges…………………………….4,000
Jackson’s policy is to use the double declining balance DDB method of depreciation in the early years of the equipment’s life and then switch to straight line halfway through the equipment’s life.
Calculate depreciation for each year of the assets eight year life.
Discuss the accounting treatment of the depreciation on the equipment.
Physics
ISBN: 978-0077339685
2nd edition
Authors: Alan Giambattista, Betty Richardson, Robert Richardson