On December 31, 2022, ABC Corporation purchased a machine for $60,000. The machine has a useful life
Question:
On December 31, 2022, ABC Corporation purchased a machine for $60,000. The machine has a useful life of 5 years and a salvage value of $10,000. The company uses the straight-line method to depreciate its assets. On December 31, 2023, the company decides to change the useful life of the machine to 4 years. Calculate the following:
a) Depreciation expense for 2022
b) Depreciation expense for 2023
c) Book value of the machine at the end of 2023
d) Gain or loss on disposal of the machine if it is sold for $40,000 at the end of 2024
e) Book value of the machine at the end of 2024 if it is not sold
Assume that the company does not use the half-year convention and that all calculations are done to the nearest dollar.
Advanced Financial Accounting
ISBN: 978-0132928939
7th edition
Authors: Thomas H. Beechy, V. Umashanker Trivedi, Kenneth E. MacAulay