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Lindy Weink, the new controller of Lafrenire Company, has reviewed the expected useful lives and residual values of selected depreciable assets at December 31, 2024. (Depreciation for 2024 has not been recorded yet.) Her findings are as follows: After discussion, management agrees to accept Lindys proposed changes. All assets are depreciated by the straight-line method. Lafrenire Company has a December

Chapter 1, Exercises #9

Lindy Weink, the new controller of Lafrenière Company, has reviewed the expected useful lives and residual values of selected depreciable assets at December 31, 2024. (Depreciation for 2024 has not been recorded yet.) Her findings are as follows: 


After discussion, management agrees to accept Lindy’s proposed changes. All assets are depreciated by the straight-line method. Lafrenière Company has a December 31 year end. 


Instructions 

a. For each asset, calculate the annual depreciation expense using the original estimated useful life and residual value. 

b. Calculate the carrying amount of each asset as at January 1, 2024. 

c. For each asset, calculate the revised annual depreciation expense and the carrying amount at December 31, 2024.

Transcribed Image Text:

Type of Asset Building Equipment Date Acquired Jan. 1, 2009 Jan. 1, 2022 Cost $800,000 125,000 Total Useful Life in Years Current Proposed 20 30 5 4 Residual Value Current $40,000 5,000 Proposed $60,500 4,000

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a. Annual depreciation current estimate Building: ($800,000 $40,00…View the full answer

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Related Book For answer-question
Accounting Principles Volume 2

Accounting Principles Volume 2

9th Canadian Edition

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak

ISBN: 9781119786634

Related Video

Depreciation of non-current assets is the process of allocating the cost of the asset over its useful life. The cost of the asset includes the purchase price, any additional costs incurred to bring the asset to its current condition and location, and any other costs that are directly attributable to the asset. The useful life of the asset is the period over which the asset is expected to be used by the company. To calculate the depreciation, companies use different methods such as straight-line, declining-balance, sum-of-the-years\'-digits, units-of-production, and group depreciation. The chosen method will depend on the type of asset, the company\'s accounting policies, and the accounting standards that are applicable. The straight-line method allocates an equal amount of the asset\'s cost over its useful life, while the declining-balance method calculates depreciation at a fixed rate, typically double the straight-line rate, but the amount of depreciation decreases over time. The sum-of-the-years\'-digits method is similar to the declining-balance method, but the rate of depreciation is calculated using a fraction that is based on the useful life of the asset. It\'s important to note that the depreciation expense will be recorded on the company\'s income statement and the accumulated depreciation will be recorded on the company\'s balance sheet. This will decrease the value of the asset on the balance sheet over time.

Answers for Questions in Chapter 1

Brief Exercises:
Exercises:
FINANCIAL REPORTING AND ANALYSIS:
Problem Set A:
Problem Set B:
Questions:

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