wMU-Central Authenticatio w Look Up Classes w Register Your iClicker M Chapter 7
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wMU-Central Authenticatio w Look Up Classes w Register Your iClicker M Chapter 7 Homework x M Check Your Work × C ezto.mheducation.com/hm.tpx ::: elinle G Google Apple Bing D YahocEl Safari s-lini : Question 4 (of 6) Save & Exit Submit value: 2.00 points The Donut Stop acquired equipment for $23,000. The company uses straight-line depreciation and estimates a residual value of $3,400 and a four-year service life. At the end of the second year, the company estimates that the equipment will be useful for four additional years, for a total service life of six years rather than the original four. At the same time, the company also changed the estimated residual value to $2,000 from the original estimate of $3,400. Required Calculate how much The Donut Stop should record each year for depreciation in years 3 to 6 Cost of the equipment Less: Accumulated Depreciation (Years 1 and 2) Book value, end of year 2 Less: New residual value New depreciable cost Remaining service life Annual depreciation in years 3 to 6 23,000 13,000 10,000 3,400 3,477 Hints References eBook & Resources Hint #1Explanation / Answer
Cost of the equipment 23000 Less: Accumulated Depreciation (Years 1 and 2) 9800 Book value, end of year 2 13200 Less: New residual value 2000 New depreciable cost 11200 Remaining service life 4 Annual dep I year 3 to 6 years 2800 Anuual dep before revision= (23000-3400)/4 = 4900 accumlated dep = 4900*20= 9800
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