This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: M83, M84, M85, M86, M 87, M88, M89, M810, E85, E814, AP 81, AP82, M83(1) R(2) C(3) C(4) R(5) C(6) N(7) C(8) R(9) NM84Calculate the book value of a three year old machineCost: $21,000Estimated residual value of $1,000Estimated useful life of four yearsStraight line deprieciation21,000 – 1000 = 20,00020,000/4 years = $5,000M85Cacluate the book value of a three year old machine that cost $25,000Estimated residual value of $5,000Estimated useful life of 5 years Uses double declining balance depreciationCost accumulated depreciation x 2/useful life – depreciation expenseFirst year 25,000 0 x 2/5 = 10,000Second year: 25,000 10,500 x 2/5 = 4000Third year= 25,000 14,000 x 2/5 = 4400Net value = 25,000 – 10,000 – 4,000 – 4400 = 1600M86Calculate the book value of a 4 year old machine that cost 21,000, has an estimated resiudla value of 1000 and has an estimated useful life of 20,000 machine hours. Company uses units of production depreciation and ran the machine 3200 hours in year 1, 7050 hours in year 2 and 7500 hours in year 321,000 1000/ 20,000 hours =$1/ machine hour$1 x (3200 + 7050 + 7500) = 17,75021,000 – 17,750= $3250M8 7 Has the asset been impaired (see page 434 for full chart)a.Yesb. Noc.Yesd. NoAmount of loss? (once again see book for full chart)a.5500b. n/a because no impairmentc.32,000d. n/a because no impairmentM88As part of major renovation, mullins pharmacy sold shelving units that were 10 years old for...
View
Full
Document
This note was uploaded on 12/01/2009 for the course H ADM 121 at Cornell.
 '07
 DDITTMAN

Click to edit the document details