Odyssey Ltd. purchased machinery on January 1, 2020, for $60,000. The machinery is estimated to have a
Question:
Odyssey Ltd. purchased machinery on January 1, 2020, for $60,000. The machinery is estimated to have a residual value of $6,000 after a useful life of eight years.
(a) Calculate the 2020 depreciation expense using the straight-line method.
(b) Calculate the 2020 depreciation expense using the straight-line method, but assuming the machinery was purchased on September 1, 2020. Do not round intermediate calculations and round the final answer to the nearest dollar.
Step by Step Answer:
a 60000 6...View the full answer
Intermediate Accounting Volume 1
ISBN: 978-1119496496
12th Canadian edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
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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