Ask Question
16 June, 04:34

Onslow Co. purchased a used machine for $178,000 cash on January 2. On January 3, Onslow paid $2,840 to wire electricity to the machine and an additional $1,160 to secure it in place. The machine will be used for six years and have a $14,000 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of.

+1
Answers (1)
  1. 16 June, 07:03
    0
    First we must determine the total cost of the machine:

    total cost = $178,000 + $2,480 + $1,160 = $181,640

    Now we must find the depreciable value:

    depreciable value = total cost - salvage value = $181,640 - $14,000 = $167,640

    since the machine is going to be used for six years, the depreciation expense per year = depreciable value / useful life

    depreciation expense per year = $167,640 / 6 years = $27,940

    if it was depreciated during 5 years, the total depreciation expense would be: $27,940 per year x 5 years = $139,700

    If the machine was depreciated before time, and sold only at its salvage value, Onslow Corp. should report a loss of $27,940.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Onslow Co. purchased a used machine for $178,000 cash on January 2. On January 3, Onslow paid $2,840 to wire electricity to the machine and ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers