Depreciation
The cost of a long term car is expensed when?
During the period in which the asset provides use to the company...when it is used.
In a period of FALLING prices, which inventory costing method gives you the highest ending inventory?
LIFO
Straight line rate =
(Acquisition Cost - salvage value)
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Estimated Useful Life
Hydroflask purchases inventory with an invoice price of $12,000 and credit terms 2/15, n/30. What is the net cost of the goods Hydroflask buys if they pay within 10 days?
Provide the Buyer(Hydroflask's) journal entry for the recognition of the sale and the actual cash payment from
Inventory 12,000
A/P. 12,000
A/P. 12,000
Cash 11,760
Inventory. 240
A tractor was purchased for 40,000. It had an estimated useful life of 10 years and a salvage value of 5,000. It was used for 6 years before sold for 15,000 dollars.
Record all the journal entry for the disposal of this asset.
Cash 15,000
Accumulated Depreciation. 21,000
Loss on Sale 4,000
Equipment 40,000
Which depreciation method results in the least depreciation expense in equipments later life?
Double-Declining
Use Straight Line:
Computer bought for 6,000 with a salvage value of 500. And an estimated useful life of 20 years. What is the annual depreciation rate?
Provide the journal entry for the first year.
275 per year
Depreciation Expense. 275
Accumulated Depreciation. 275
An ice cream machine was bought for 6,500 dollars with an estimated salvage value of 2,000. The straight line annual depreciation is 450 dollars. The accumulated depreciation account is at 3,600. What is the remaining useful life?
2 Years