LHD Freight purchased a building for $ 700,000 and depreciated it on a straight-line basis over a
Question:
LHD Freight purchased a building for $ 700,000 and depreciated it on a straight-line basis over a 40-year period. The estimated residual value was $ 100,000. After using the building for 15 years, LHD realized that wear and tear on the building would force the company to replace it before 40 years. Starting with the sixteenth year, LHD began depreciating the building over a revised total life of 30 years and increased the estimated residual value to $ 175,000. Record depreciation expense on the building for years 15 and 16.
Step by Step Answer:
Journal DATE ACCOUNT DR CR Year 15 DepreciationExpense Building 15000 AccumulatedDepre...View the full answer
Financial Accounting
ISBN: 978-0132889711
1st Canadian Edition
Authors: Jeffrey Waybright, Liang Hsuan Chen, Rhonda Pyper
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
Students also viewed these Accounting questions
-
Norman Freight purchased a building for $1,100,000 and depreciated it on a straight-line basis over a 30-year period. The estimated residual value was $140,000. After using the building for 15 years,...
-
Pembrook Freight purchased a building for $1,000,000 and depreciated it on a straight line basis over a 30-year period. The estimated residual value was $130,000. After using the building for 15...
-
Chapin Freight purchased a building for $800,000 and depreciated it on a straight-line basis over a 30-year period. The estimated residual value was $110,000. After using the building for 15 years,...
-
On July 1, 2021, Katrina purchased tax-exempt bonds (face value of $75,000) for $82,000. The bonds mature in five years, and the annual interest rate is 3%. a. How much interest income and/or...
-
HSBC has over $1 trillion in assets and operates in about 100 countries. It calls itself the worlds local bank." What business strategies does this phrase suggest? Why might these strategies be...
-
A hiker is climbing a steep 10 slope. Her pedometer shows that she has walked 1500 m along the slope. How much elevation has she gained?
-
Water flows from the pipe shown in Fig. P3.117 as a free jet and strikes a circular flat plate. The flow geometry shown is axisymmetrical. Determine the flowrate and the manometer reading, \(H\)....
-
1. Assume your team members have used the Training Unit Client Characteristics Report to design a database table to store the relevant information contained on this report, with the following result:...
-
Explore the concept of the "six big losses" in TPM. How can advanced data analytics and process automation aid in identifying and mitigating these losses to improve Overall Equipment Effectiveness...
-
Target purchases home goods made by a supplier in China.Targets stores in the United States sell 200,000 units of home goods each month. Each unit costs $10 and the company has an annual holding cost...
-
Memorial Medical Centre bought equipment on January 2, 2014, for $ 30,000. The equipment was expected to remain in service for four years and to perform 1,000 operations. At the end of the equipments...
-
On January 2, 2014, Bright Lights purchased showroom fixtures for $ 10,000 cash, expecting the fixtures to remain in service for five years. Bright Lights has depreciated the fixtures on a straight-...
-
Williamson, Inc., manufactures quality replacement parts for the auto industry. The company uses a standard costing system and isolates variances as soon as possible. The purchasing manager is...
-
In additional to whistleblowing, explain at least two other exceptions to at-will employment.?
-
Imagine creating a platform for individuals to connect and sell meals out of their home or apartment to paying customers in a way similar to Uber. What concerns could this raise?
-
10. a factory has a machine that dispenses 80 mL of fluid in a bottle. An employee believes the average amount of fluid is not 80 mL. Using 40 samples, he measure the average amount dispensed by the...
-
W Mart is considering offering one hour photo developing in their store. Assume the project of providing the new service has a life of 5 years and the firm expects that sales from the new service...
-
Suppose that adidas collaborated with the NFL to create a series of sports shoes and apparel incorporating the colors and logos of the various NFL teams, and bearing both the adidas and NFL brands....
-
List and briefly explain five use cases for IBM Watson.
-
One hundred pounds of water at atmospheric pressure are heated from 60F to 200F. What is the enthalpy change? The internal energy change? Why is the difference between the internal energy change and...
-
The following information is available for Gerard Corporation (a) Compute earnings per share for 2012 and 2011 for Gerard, and comment on the change. Gerard??s primary competitor, Thorpe Corporation,...
-
The following are characteristics, assumptions, principles, or constraints that guide the FASB when it creates accounting standards. Relevance ........... Periodicity assumption Faithful...
-
The following are characteristics, assumptions, principles, or constraints that guide the FASB when it creates accounting standards. Relevance ........... Periodicity assumption Faithful...
-
A project that costs $4,450 to install will provide annual cash flows of $1,500 for each of the next 6 years. a. What is NPV if the discount rate is 11%? b. How high can the discount rate be before...
-
Prove MM1: Both Umbrella Inc. and Prixxa Inc. produce $300,000 of cash flow each year. Umbrella has no debt outstanding, and its cost of equity capital is 14 percent. But Prixxa has 1,000,000 depts...
-
How did they find the over head rate percentages for current year and last year? A job order cost sheet for Cullumber Company is shown below. Job No. 92 For 2,000 Units Date Direct Materials Direct...
Study smarter with the SolutionInn App