accounting

posted by .

James, Inc. discovered that equipment purchased three years ago for $600,000 will not last as long as originally estimated. The firm was depreciating the equipment at the rate of $80,000 per year with an estimated salvage value of $40,000. New estimates indicate that the equipment will last a total of five years with no salvage value. How much should James Inc. record as depreciation in year four?

  • accounting -

    The 3 years depreciation is: (3*80,000): 240,000

    The Asset Net Book Value at the end of third year is: (600,000-240,000) : 360,000

    Depreciation in Year: 4: (360,000/5) : 72,000 / Year.

    You can reach me at: aexam (at) h o t m a i l (dot) com..

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. accounting

    Computer equipment was acquired at the beginning of the year at a cost of $56,000 that has an estimated residual value of $3,000 and an estimated useful life of 5 years. Determine the 2nd year’s depreciation using straight-line depreciation
  2. accounting

    How do i calculate this problem. An asset was purchased for $150,000. It had an estimated salvage value of $30,000 and an estimated useful life of 10 years. After 5 years of use, the estimated salvage value is revised to $24,000 but …
  3. Accounting

    I am trying to figure out if I am doing this accounting problem correctly?
  4. Finance

    Dr. Whitten has decided to purchase equipment that has a cost of $60,000 and will produce a pretax net cash inflow of $30,000 per year over its estimated useful life of six years. The equipment will have no salvage value and will be …
  5. accounting

    On January 1, 2006, Powell Company purchased a building and machinery that have the following useful lives, salvage value, and costs. Building, 25-year estimated useful life, $4,000,000 cost, $400,000 salvage value Machinery, 10-year …
  6. accounting

    A company purchased a machine on January 1 of the current year for $750,000. Calculate the annual depreciation expense for each year of the machine's life (estimated at 5 years or 20,000 hours, with a salvage value of $75,000). During …
  7. financial accounting

    eckman company purchased equipment for $80,000 on january 1,2011 and will use the double declining balance method of depreciation. it is estimated that the equipment will have a 5 year life and a $4,000 salvage value at the end of …
  8. accounting

    1-On May 1, 2012, Pinkley Company sells office furniture for $150,000 cash. The office furniture originally cost $375,000 when purchased on January 1, 2005. Depreciation is recorded by the straight-line method over 10 years with a …
  9. managerial accounting

    Equipment reported in the December 31, 2013, balance sheet was purchased in January 2013. It is being depreciated over eight years under the straight-line method with no salvage value. The following amounts for new equipment purchases …
  10. Accounting

    On 2015 January 1, Jackson Company purchased equipment for $440,000. The equipment has an estimated useful life of 10 years and an estimated salvage value of $40,000. If Jackson uses the straight-line depreciation method, what is the …

More Similar Questions