On August 3, Cinco Construction purchased special-purpose equipment at a cost of
ID: 2595214 • Letter: O
Question
On August 3, Cinco Construction purchased special-purpose equipment at a cost of $2,664,800. The useful life of the equipment was estimated to be eight years, with an estimated residual value of $60,940.
a. Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the straight-line depreciation method (half-year convention).
Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the straight-line depreciation method (half-year convention). (Adjust year 9 depreciation, if necessary, so that the total depreciation expense equals depreciable value of the asset. Do not round intermediate calculations and round your final answers to the nearest whole number.)
****************** The one in red is wrong. Please help with that one******************
Straight Line (Half Year Year Convention $ 162,741 325,483 325,483 325,483 325,483 325,483 325,483 325,483 162,741 Totals 2,603,863Explanation / Answer
Hello
You are mistaking that you are ignoring salvage value while solving the question.
Cost: $2,664,800.00, Salvage: $60,940.00
Life: 8 years,
Year Depreciation
1 $162,741.25
2 $325,482.50
3 $325,482.50
4 $325,482.50
5 $325,482.50
6 $325,482.50
7 $325,482.50
8 $325,482.50
9 $162,741.25
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