Hoang Lam Company purchased a new machine on October 1, 2020, at a cost of 96,000....
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Hoang Lam Company purchased a new machine on October 1, 2020, at a cost of €96,000. The company estimated that the machine would have a residual value of €12,000. The machine is expected to be used for 10,000 working hours during its 5-year life. Required: Compute the depreciation expense under the following methods for the year indicated. a. Straight-line for 2020. (0.5 marks) b. Units-of-activity for 2020, assuming machine usage was 1,700 hours. (0.5 marks) c. Declining-balance using double the straight-line rate for 2020 and 2021. (0.5 marks) d. What are relationships between depreciation expense and net income? Suppose the net income before depreciation of the company was €187.000 USD, calculate the net income after depreciation and make suggestion on choices of depreciation method for the company? (0.5 marks). Hoang Lam Company purchased a new machine on October 1, 2020, at a cost of €96,000. The company estimated that the machine would have a residual value of €12,000. The machine is expected to be used for 10,000 working hours during its 5-year life. Required: Compute the depreciation expense under the following methods for the year indicated. a. Straight-line for 2020. (0.5 marks) b. Units-of-activity for 2020, assuming machine usage was 1,700 hours. (0.5 marks) c. Declining-balance using double the straight-line rate for 2020 and 2021. (0.5 marks) d. What are relationships between depreciation expense and net income? Suppose the net income before depreciation of the company was €187.000 USD, calculate the net income after depreciation and make suggestion on choices of depreciation method for the company? (0.5 marks).
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Related Book For
Accounting Principles
ISBN: 978-1119419617
IFRS global edition
Authors: Paul D Kimmel, Donald E Kieso Jerry J Weygandt
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