On January 1, 2010, Landon Excavation Company purchased a new bulldozer for $120,000. The equipment had an
Question:
On January 1, 2010, Landon Excavation Company purchased a new bulldozer for $120,000. The equipment had an estimated useful life of 10 years and an estimated residual value of $10,000. On January 1, 2012, Landon determined that the bulldozer would have a total useful life of only 8 years instead of 10 years with no change in residual value. Landon uses straight-line depreciation. Compute depreciation expense on this bulldozer for 2010, 2011, and 2012.
Step by Step Answer:
Original depreciation 120000 10000 11000010 years 11000 per year 2010 11000 ...View the full answer
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
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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