Apex Fitness Club uses straight-line depreciation for a machine costing $23,860, with an estimated fouryear life and
Question:
Apex Fitness Club uses straight-line depreciation for a machine costing $23,860, with an estimated fouryear life and a $2,400 salvage value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which it will have an estimated $2,000 salvage value. Compute
(1) The machine’s book value at the end of its second year
(2) The amount of depreciation for each of the final three years given the revised estimates.
Step by Step Answer:
1 Answer Book Value of Asset 13130 2 Depreciation from ...View the full answer
Financial Accounting Information For Decisions
ISBN: 9781260705584
10th Edition
Authors: John J. Wild
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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