On, April 1, 2020, S. Products Co. purchased new machinery for $450,000. The machinery has an estimated useful life of eight years and 15,000 salvage value. The company computed the depreciation by the double declining method in 31/03/2022 the company decided to exchange its machinery with new one, in that date the old machine fair market value estimated to$ 270,000. The company will pay $150,000 and the old machine to get the new one (no- commercial substances). The new machine will depreciate on sum-of-the-years'-digits method with estimated 13000 salvage value and four years estimated useful life. In 1/1/2024 the company decided to disposal the machine through donated to local association. The company financial is calendar year. Required: Journalize all entries required for the machine from 1//4/2020-1/1/2024

On, April 1, 2020, S. Products Co. purchased new machinery for $450,000. The machinery has an estimated useful life of eight years and 15,000 salvage value. The company computed the depreciation by the double declining method in 31/03/2022 the company decided to exchange its machinery with new one, in that date the old machine fair market value estimated to$ 270,000. The company will pay $150,000 and the old machine to get the new one (no- commercial substances). The new machine will depreciate on sum-of-the-years'-digits method with estimated 13000 salvage value and four years estimated useful life. In 1/1/2024 the company decided to disposal the machine through donated to local association. The company financial is calendar year. Required: Journalize all entries required for the machine from 1//4/2020-1/1/2024

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...

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Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.
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