Machinery was purchased on January 1 for $51,000. The machinery has an estimated
ID: 2445884 • Letter: M
Question
Machinery was purchased on January 1 for $51,000. The machinery has an estimated life of 7 years and an estimated salvage value of $9,000. Double-declining-balance depreciation for the second year would be (round calculations to the nearest dollar):
A. $10,929
B. $10,408
C. $10,500
D. $6,000
On December 31, Strike Company traded-in one of its batting cages for another one that has a cost of $500,000. Strike receives a trade-in allowance of $11,000. The old equipment had an initial cost of $215,000 and has accumulated depreciation of $185,000. Depreciation has been recorded up to the end of the year. The difference will be paid in cash. What is the amount of the gain or loss on this transaction?
A. gain of 11,000
B. no loss or gain will be recorded
C. loss of 19,000
D. loss of 11,000
Equipment with a cost of $160,000, an estimated residual value of $40,000, and an estimated life of 15 years was depreciated by the straight-line method for 4 years. Due to obsolescence, it was determined that the useful life should be shortened by 3 years and the residual value changed to zero. The depreciation expense for the current and future years is
a) $16,000
b)$8,000
c)$11,636
d)$11,000
On December 31, Strike Company sold one of its batting cages for $50,000. The equipment had an original cost of $310,000 and has accumulated depreciation of $260,000. Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction?
A. gain of 50,000
B. cannot be determined
C. no gain or loss
D. loss of 50,000
Explanation / Answer
Answer to the 1st question:
Depreciation rate under Double declining balance method =
(1/Useful life)*200% = (1/7) *200% = 28.57%
First year depreciation = $51,000*28.57% = $14,571
2nd Year depreciation = ($51,000-$14,571) * 28.57% = $10,408 (ans)
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.