What is the proper accounting for depreciation when new or additional information becomes available that causes a company to change its estimates of useful life or residual value?
Answer to relevant QuestionsHow is the sale of equipment at an amount greater than its book value recorded? How would your answer change if the equipment is sold at an amount less than its book value? What is an impairment of a fixed asset? How do the accelerated and straight-line depreciation methods differ? On January 1, 2009, Slade Inc. purchased a machine for $115,000. Slade depreciated the machine with the straight-line depreciation method over a useful life of 10 years, using a residual value of $5,000. At the beginning of ...Items that may relate to property, plant, and equipment follow: 1. Purchase price of a machine 2. Delinquent property taxes at the time of purchase 3. Interest on debt used to purchase equipment 4. Sales taxes paid on ...
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