Robert Parish Corporation purchased a new machine for its assembly process on August 1, 2020. The cost
Question:
Robert Parish Corporation purchased a new machine for its assembly process on August 1, 2020. The cost of this machine was $117,900. The company estimated that the machine would have a salvage value of $12,900 at the end of its service life. Its life is estimated at 5 years, and its working hours are estimated at 21,000 hours. Year-end is December 31.
Instructions
Compute the depreciation expense under the following methods. Each of the following should be considered unrelated.
a. Straight-line depreciation for 2020.
b. Activity method for 2020, assuming that machine usage was 800 hours.
c. Sum-of-the-years’-digits for 2021.
d. Double-declining-balance for 2021.
Salvage ValueSalvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Corporation
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Step by Step Answer:
Intermediate Accounting
ISBN: 978-1119503668
17th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfiel