1. Harris Corporation purchased factory equipment that was installed and put into service January 2, 2006, at a total cost of $60,000. Salvage value was estimated at $4,000. The equipment is being depreciated over four years using the double-declining balance method. For the year 2007, Harris should record depreciation expense on this equipment of:
2. A plant asset has a salvage value of $6,000 and a cost of $24,000. The asset has a three-year life. If third year depreciation amounted to $3,000, which depreciation method was used?
d. Cannot tell from information given
3. Spencer Co. purchased machinery on January 2, 2002, for $440,000. The straight-line method is used and useful life is estimated to be 10 years, with a $40,000 salvage value. At the beginning of 2008 Spencer spent $96,000 to overhaul the machinery. After the overhaul, Spencer estimated that the useful life would be extended 4 years (14 years total), and the salvage value would be $20,000. The depreciation expense for 2008 should be:
This question was answered on: Sep 16, 2020
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