Golden Manufacturing Company started operations by acquiring $150,000 cash from the issue of common stock. On January
Question:
Golden Manufacturing Company started operations by acquiring $150,000 cash from the issue of common stock. On January 1, 2018, the company purchased equipment that cost $120,000 cash, had an expected useful life of six years, and had an estimated salvage value of $4,000. Golden Manufacturing earned $72,000 and $83,000 of cash revenue during 2018 and 2019, respectively. Golden Manufacturing uses double-declining-balance depreciation.
Required
a. Record the previous transactions in a horizontal statements model like the following one.
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b. Prepare income statements, balance sheets, and statements of cash flows for 2018 and 2019. Use a vertical statements format.
Salvage ValueSalvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
Step by Step Answer:
Depreciation Calculation Cost Accumulated Depr x 2 x SL Rate SL Rate 1 6 16667 Year 1 120000 0 x 2 x 16667 40000 Year 2 120000 40000 x 2 x 16667 26667 ...View the full answer
Survey of Accounting
ISBN: 978-1259631122
5th edition
Authors: Thomas Edmonds, Christopher Edmonds, Philip Olds, Frances McNair, Bor Yi Tsay
