On January 1, 2018, Herro Corp. purchased equipment for $177,000. The equipment was estimated to have...

 

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On January 1, 2018, Herro Corp. purchased equipment for $177,000. The equipment was estimated to have a ten year useful life and a salvage value of $15,000. Straight line depreciation was used. On December 31, 2023, after depreciation had been recorded, Herro tested the asset for potential impairment. At that date, the equipment had estimated undiscounted future cash flows of $76,896, and a fair value of $58,800. Herro intends to continue to use the equipment, and there is no change to the estimate of the equipment's useful life or salvage value, regardless of the outcome of the impairment test. How much depreciation will be charged to the equipment in 2024? On January 1, 2018, Herro Corp. purchased equipment for $177,000. The equipment was estimated to have a ten year useful life and a salvage value of $15,000. Straight line depreciation was used. On December 31, 2023, after depreciation had been recorded, Herro tested the asset for potential impairment. At that date, the equipment had estimated undiscounted future cash flows of $76,896, and a fair value of $58,800. Herro intends to continue to use the equipment, and there is no change to the estimate of the equipment's useful life or salvage value, regardless of the outcome of the impairment test. How much depreciation will be charged to the equipment in 2024?

Answer rating: 100% (QA)

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