The Riverside Company purchased equipment with a list price of $70 on January 1,
ID: 2471848 • Letter: T
Question
The Riverside Company purchased equipment with a list price of $70 on January 1, 2015. Sales tax on the equipment amounted to $5; Riverside paid $10 to ship it to its factory; and the firm paid $15 to install it. Riverside depreciates the equipment over four years and the equipment has no salvage value.
Required:
Complete the following table assuming Riverside depreciates the equipment on a straight-line basis.
Income Statements:
2015
2016
Depreciation expense
Balance Sheets:
12/31/15
12/31/16
Equipment, cost
Less: accumulated depreciation
Equipment, net
Complete the following table assuming Riverside depreciates the equipment using the double-declining balance method.
Income Statements:
2015
2016
Depreciation expense
Balance Sheets:
12/31/15
12/31/16
Equipment, cost
Less: accumulated depreciation
Equipment, net
Income Statements:
2015
2016
Depreciation expense
Balance Sheets:
12/31/15
12/31/16
Equipment, cost
Less: accumulated depreciation
Equipment, net
Explanation / Answer
Machine Cost 100 Life in years 4 Salvage value 0 Yearly Depriciation on straight method 25 straight method Income Statements: 2015 2016 Depriciation Expenses 25 25 Balance Sheet: 2015 2016 Equipment Cost 100 100 Less: Accumulated Depriciation 25 50 Equipment Net 75 50 Double Declining method Income Statements: 2015 2016 Depriciation Expenses 50 25 Balance Sheet: 2015 2016 Equipment Cost 100 100 Less: Accumulated Depriciation 50 75 Equipment Net 50 25 calculation of Depriciation Opening value Deprciation Closing Value 100 50 50 50 25 25
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