Equipment 300,000Notes Payable 270,000Cash 30,000Note that both the liability and asset will decline over time. As in yesterday's assignment, assume straight line depreciation, with an estimated salvage value of $50,000. At the end of eight years, the equipment is sold for $40,000. On the date of purchase, 1/1/year1, the company hadAssets (possibly among other assets) : Equipment $300,000Liabilities (possibly among other liabilities) : Note Payable $270,000Prepare a spreadsheet showing what these asset and liability balances will be for years 1 through 8, end of year. You will need to add a line to show accumulated depreciation, as well as "Equipment, net accumulated depreciation". For year 8, show all accounts and balances, even if they are zero.

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Business

Ximena Reynolds

27 April, 08:34

Equipment 300,000Notes Payable 270,000Cash 30,000Note that both the liability and asset will decline over time. As in yesterday's assignment, assume straight line depreciation, with an estimated salvage value of $50,000. At the end of eight years, the equipment is sold for $40,000. On the date of purchase, 1/1/year1, the company hadAssets (possibly among other assets) : Equipment $300,000Liabilities (possibly among other liabilities) : Note Payable $270,000Prepare a spreadsheet showing what these asset and liability balances will be for years 1 through 8, end of year. You will need to add a line to show accumulated depreciation, as well as "Equipment, net accumulated depreciation". For year 8, show all accounts and balances, even if they are zero.

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Hamilton · Answer 1

Equipment: 300,000 for all years

Accumulated depreciation

Year Value at year-end

1 31250

2 62500

3 93750

4 125000

5 156250

6 187500

7 218750

8 250000

Equipment (net)

Year Value at year-end

1 268750

2 237500

3 206250

4 175000

5 143750

6 112500

7 81250

8 50000

Explanation:

Equipment: 300,000

depreciation per year under straight-line method:

(cost-salvage value) / useful life

300,000 - 50,000 = 250,000 amount subject to depreciation

250,000 / 8 = 31,250 depreciation per year

Equipment will remain constant at 300,000 but accumualted depreciation will increase by this amount each. This makes the net value decrease each year.