Assume that Bloomer Company purchased a new machine on January 1, 2010, for $80,

Question

Assume that Bloomer Company purchased a new machine on January 1, 2010, for $80,000. The machine has an estimated useful life of nine years and a residual value of $8,000. Bloomer has chosen to use the straight-line method of depreciation. On January 1, 2012, Bloomer discovered that the machine would not be useful beyond December 31, 2015, and estimated its value at that time to be $2,000 1. Calculate the depreciation expense, accumulated depreciation, and book value of the asset for each year 2010 to 2015. (Do not enter depreciation or accumulated depreciation as negative amounts; if necessary, round any depreciation calculations to the nearest dollar.).

Explanation / Answer

deprecition expense 2010 = (80000 - 8000)/9 = $8000 Accumulated Depreciation = $8000 Book value = 80000 - 8000 = $72000 deprecition expense 2011 = $8000 Accumulated Depreciation = $16000 Book value = 80000 - 8000 = $64000 Assumed on 2012 that value of asset on 2015 end = $2000 Recalculating depreciation we get (64000 - 2000) / 4 = $15,500 Hence, deprecition expense 2012 = $15500 Accumulated Depreciation(16000 +15500) = $31500 Book value = 64000 - 15500 = $48500 deprecition expense 2013 = $15500 Accumulated Depreciation(16000 +15500 + 15500) = $47000 Book value =48500 - 15500 = $33000 deprecition expense 2014 = $15500 Accumulated Depreciation(16000 +15500 + 15500 + 15500) = $62,500 Book value =33000 - 15500 = $17500 deprecition expense 2014 = $15500 Accumulated Depreciation(16000 +15500 + 15500 + 15500 + 15500) = $78000 Book value =17500 - 15500 = $2000

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.