Pharoah Ltd. purchased equipment on January 1, 2015 at a cost of $196,670. The equipment has...

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Pharoah Ltd. purchased equipment on January 1, 2015 at a cost of $196,670. The equipment has an estimated useful life of 10 years and a residual value of $9,150. Pharoah realized that there was a declining demand for the product being produced by the equipment. Given this indicator of possible impairment, management determined that the recoverable amount of the asset on December 31, 2018 was $97,250. The company uses the straight-line method of depreciation. (a) Calculate the annual depreciation and the carrying amount at December 31, 2018. Annual depreciation Carrying amount tA $ tA $ Pharoah Ltd. purchased equipment on January 1, 2015 at a cost of $196,670. The equipment has an estimated useful life of 10 years and a residual value of $9,150. Pharoah realized that there was a declining demand for the product being produced by the equipment. Given this indicator of possible impairment, management determined that the recoverable amount of the asset on December 31, 2018 was $97,250. The company uses the straight-line method of depreciation. (a) Calculate the annual depreciation and the carrying amount at December 31, 2018. Annual depreciation Carrying amount tA $ tA $

Answer rating: 100% (QA)

a To calculate the depreciation on December 31 2018 we need to determine the annual depreciation exp... View the full answer