Powell Manufacturing purchased machinery for $300,000 at the beginning of 2009. A six-year life was estimated and
Question:
Powell Manufacturing purchased machinery for $300,000 at the beginning of 2009. A six-year life was estimated and no residual value was anticipated. Straight-line depreciation is used. At the beginning of 2011, the estimated useful life was revised to 10 years in total. What type of accounting change is this? Determine depreciation for 2011.
Step by Step Answer:
This is a change in accounting estimate When an estimate is revised as new in...View the full answer
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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
-
The following footnote was disclosed at the beginning of 2011 (January 1, 2011). The capital lease began on January 1, 2010when the fair value of the capital lease was $21,776 (with a six-year life)....
-
At the beginning of year 1, you have $10,000. Investments A and B are available; their cash flows are shown in the file S14_84.xlsx. Assume that any money not invested in A or B earns interest at an...
-
The Curious Accountant story at the beginning of this chapter referred to the Coca-Cola Company and discussed who its stakeholders are. This chapter has introduced the basic structure of the four...
-
Mr. Lawrence had been the manager at Pleasure Sdn Bhd (PSB) since 1 February 2016. His employment was terminated on 30 April 2021 due to disputes with the directors of PSB. After many appeals,...
-
Describe how Web caching can reduce the delay in receiving a requested object. Will Web caching reduce the delay for all objects requested by a user or for only some of the objects? Why?
-
An article in the Economist magazine on crowd-funding argued: Start-ups are especially needy now, since many banks are loth to lend even to well-established companies. a. Why might banks be reluctant...
-
Identify what type of comparison group will be used opposite of the treatment group. Why would this type of comparison group be used? Develop a hypothetical research scenario that would necessitate...
-
Anwar Askari is planning to manage and operate AA Caddy Service at Mission Valley Golf and Country Club during June through August 2012. Anwar will rent a small maintenance building from the country...
-
Uranium price breaches US$60 a pound as demand outstrips supply By Tim Tread gold, September 7, 2023 It's getting harder by the day to ignore the uranium revival as the price breaches the US$60 lev?
-
The fixed asset acquisition procedures for Turner Brothers, Inc., are as follows: Supervisors in the user departments determine their fixed asset needs and submit bids or orders directly to...
-
The Korver Company decided to change its inventory costing method from average to FIFO. The depreciation method also was changed from double-declining balance to straight line. Identify the type of...
-
O'Reilly Beverage Company reported net income of $650,000 for 2011. In addition, the company deferred a $60,000 pretax loss on derivatives and had pretax net unrealized holding gains on investment...
-
Delia purchased a new car for $25,350. This make and model straight line depreciates to zero after 13 years. a. Identify the coordinates of the x- and y-intercepts for the depreciation equation. b....
-
What is the cost of equity for a firm that has a beta of 1.2 if the risk-free rate of return is 2.9 percent and the expected market return is 11.4 percent?
-
6- Complete the Table below, assuming a profit allowance of $3.00 per tonne. Then, assuming a stripping cost of $2.00 per tonne of waste and a copper price of $3.63 Ab. calculate the economic...
-
Home Depot has debt outstanding with a face value of $40 billion. The coupon rate on these bonds is 5.7%. The current yield-to-maturity (YTM) on these bonds is 7.8%. Home Depots tax rate is 30%. What...
-
The Petit Chef Co. has a 6% coupon bonds with 5 years left to maturity. The bonds make semi-annual payments and has a par value of $2,000. If the bonds sell for $2,200, what is the yield-to-maturity?...
-
What is time value of money? Why is it important in finance? Discuss the application of time value of money concept in finance with example/s.
-
A simple problem illustrates how the error is related to step size. Consider the following problem: The numerical solution using the explicit first-order Euler method, and the step size h = 0.2, is...
-
The diameter of a sphere is 18 in. Find the largest volume of regular pyramid of altitude 15 in. that can be cut from the sphere if the pyramid is (a) square, (b) pentagonal, (c) hexagonal, and (d)...
-
A circuit response is shown in Figure \(P_{5}=31\) that occurs when one exponential stops and another begins where the prior one left off. Determine an approximate expression for the waveform....
-
Define a financial instrument. Provide three examples of current liabilities that represent financial instruments.
-
Whole-life insurance policies typically can be surrendered while the insured is still alive in exchange for a determinable amount of money called the cash surrender value. When a company buys a life...
-
Whole-life insurance policies typically can be surrendered while the insured is still alive in exchange for a determinable amount of money called the cash surrender value. When a company buys a life...
-
The Kingdom of Narth the Maladapted has 4.45 million residents, and the Domain of Garglehook the Gregarious has 5.21 million residents. There are 66,216 wizards in the Kingdom of Narth, and 72,455...
-
More people are wanting to watch Alabama football. At the same time, UA expands the stadium to add more seats. What happens to the equilibrium price and quantity of Football seat tickets?
-
Read the paragraph extracted from the introduction and explain the main argument of this paragraph. Taxes are the primary means by which most countries' economies generate revenue, taxes play an...
Study smarter with the SolutionInn App