Question 92 Equipment was purchased for 82400 on January 1 2

Question 92

Equipment was purchased for $82400 on January 1, 2016. Freight charges amounted to $3200 and there was a cost of $12000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $16000 salvage value at the end of its 5-year useful life. What is the amount of accumulated depreciation at December 31, 2017, if the straight-line method of depreciation is used?

Question 111

A plant asset was purchased on January 1 for $64600 with an estimated salvage value of $10000 at the end of its useful life. The current year\'s depreciation expense is $3900 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the year is $27300. The remaining useful life of the plant asset is

Question 201

A company has the following assets:

Buildings and Equipment,

    less accumulated depreciation of $5100000

$22900000

Copyrights

2200000

Patents

13000000

Land

15000000

The total amount reported under Property, Plant, and Equipment would be?

Question 211

Equipment with a cost of $452000 has an estimated salvage value of $32000 and an estimated life of 4 years or 10000 hours. It is to be depreciated by the units-of-activity method. What is the amount of depreciation for the first full year, during which the equipment was used 3200 hours?

Question 216

Crane Company purchased a new van for floral deliveries on January 1, 2017. The van cost $52000 with an estimated life of 10 years and $14000 salvage value at the end of its useful life. The double-declining-balance method of depreciation will be used. What is the depreciation expense for 2017?

Solution

Answer to Question 92:

Cost of Equipment = Purchase Price + Freight Charge + Installation Charge
Cost of Equipment = $82,400 + $3,200 + $12,000
Cost of Equipment = $97,600

Salvage Value = $16,000
Useful Life = 5 years

Annual Depreciation = (Cost of Equipment - Salvage Value) / Useful Life
Annual Depreciation = ($97,600 - $16,000) / 5
Annual Depreciation = $16,320

Accumulated Depreciation at December 31, 2017 = Depreciation Expense for 2016 + Depreciation Expense for 2017
Accumulated Depreciation at December 31, 2017 = $16,320 + $16,320
Accumulated Depreciation at December 31, 2017 = $32,640

Answer to Question 111:

Cost of Asset = $64,600
Salvage Value = $10,000

Annual Depreciation = (Cost of Asset - Salvage Value) / Useful Life
$3,900 = ($64,600 - $10,000) / Useful Life
Useful Life = 14 years

Accumulated Depreciation = $27,300
Years lapsed * Annual Depreciation = $27,300
Years lapsed * $3,900 = $27,300
Years lapsed = 7 years

Remaining Useful life = 14 - 7
Remaining Useful life = 7 years