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# 10 - M8-4(Cost-Residual Value 1/useful years = deprecation...

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M8-4 (Cost-Residual Value) * 1/useful years = deprecation expense DEPRECIATION ACCUM. NET VALUE year one: (21,500 – 1,500) * ¼ = 5,000 5,000 16,500 year two: 5,000 10,000 11,500 year three: 5,000 15,000 \$6,500 M8-5 (Cost – Accumulated Deprecation) * 2/useful life = depreciation expense (21,500 – 0) * 2/4 – 10,750 DEPRECIATION ACCUM NET VALUE (21,500 – 0) * ½ = 10,750 10,750 10,750 (21,500 – 10,750) * ½ = 5,375 16,125 5,375 (21,500 – 16,125) * ½ = 2,688 18,813 \$2,687 M8-6 (Cost – Residual Value) / Estimated Total Production * Actual Production = DE (21,500 – 1,500) / 20,000 * 3,000 DEPRECIATION ACCUM NET VALUE 1 * 3,000 3,000 3,000 18,500 1 * 8,000 8,000 11,000 10,500 1 * 7,000 7,000 18,000 \$3,500 M8-7 Book Value Estimated Future C.F. Fair Value Asset Impaired? Amount Lost MACHINE \$16,000 \$10,000 \$9,000 Y \$7,000 COPYRIGHT 40,000 41,000 39,000 N - FACTORY 50,000 35,000 30,000 Y 20,000 BUILDING 230,000 230,000 210,000 N - M8-8 (Cost – Residual Value) * 1/useful years = D.E. (6,200 – 200) * 1/12 = \$500 Original Cost 6,200 Accum. Depreciation 5,000 Net Value \$1,200 Cash 1,400 Accum. Deprecation 5,000 Store Fixtures 6,200 Gain 200

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M8-9 Elizabeth Pie Co. should accept the offer – the \$5,000,000 is more than their value of \$4,800,000. Bonanza would record \$200,000 in goodwill – but they should ask for a higher purchasing price. M8-10 Wagner Company Excerpt from Statement of Cash Flow
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10 - M8-4(Cost-Residual Value 1/useful years = deprecation...

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