Ch07 adj Werner Jones Mgt Acctg PP97 2003

Bill smith partners purchased computer bill equipment

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Unformatted text preview: e the relevant cost of various decisions. • Bill Smith & Partners purchased computer Bill equipment two weeks ago for $35,500. • Estimated useful life is 5 years with a residual Estimated value of $500. • Depreciation method is straight-line at Depreciation $7,000 per year. ©2009 Michael Werner and Kumen Jones, Introduction to Management Accounting, 3e Werner/Jones 7 ­ 9 LO4 Equipment Replacement – Gather Relevant Information • Cost of operating equipment is two Cost operators at $18,000 per year each. • There is a cancelable maintenance There contract which costs $1,000/year. • Equipment can be sold now for $10,000. Equipment ©2009 Michael Werner and Kumen Jones, Introduction to Management Accounting, 3e Werner/Jones 7 ­ 10 LO4 Equipment Replacement – Gather Relevant Information • A new model can be purchased for $76,000. can • Estimated useful life is 5 years with a Estimated residual value of $1,000. • Depreciation method is straight-line at Depreciation $15,000 per year. ©2009 Michael Werner and Kumen Jones, Introduction to Management Accounting, 3e Werner/Jones 7 ­ 11 LO4 Equipment Replacement – Gather Relevant...
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