Golden Manufacturing Company started operations by acquiring $150,000 cash from the issue of common stock. On January
Question:
Golden Manufacturing Company started operations by acquiring $150,000 cash from the issue of common stock. On January 1, Year 1, the company purchased equipment that cost $120,000 cash, had an expected useful life of six years, and had an estimated salvage value of $4,000. Golden Manufacturing earned $72,000 and $83,000 of cash revenue during Year 1 and Year 2, respectively. Golden Manufacturing uses double-declining-balance depreciation.
Required
a. Record the preceding transactions in a horizontal statements model like the following one:
b. Prepare income statements, balance sheets, and statements of cash flows for Year 1 and Year 2.
Salvage 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...
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Depreciation Calculation Cost Accumulated Depr x 2 x SL Rate SL Rate 1 6 16667 Year 1 120000 0 x 2 x ...View the full answer
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Related Book For 
Introductory Financial Accounting for Business
ISBN: 978-1260299441
1st edition
Authors: Thomas Edmonds, Christopher Edmonds
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