HomeworkLib
Question

On January 1, 20X1, Emily’s Boutique purchased equipment for $74,000 which is expected to have a...

On January 1, 20X1, Emily’s Boutique purchased equipment for $74,000 which is

expected to have a 8-year useful life and a $4,000 salvage value. Using straight-line depreciation, what is book or carrying value of this equipment that will appear in the statement of financial position on December 31, 20X3?

a.$42,000

b. $44,000

c.$47,750

d.46,250

please show work thank you for helping me

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Depreciation expense per year (Straight line depreciation) = (Cost - salvage value) / Years

= ($74,000 - $4,000) / 8 years

= $8,750

Accumulated Depreciation for 3 years = Depreciation Expense for 20X1 + Depreciation Expense for 20X2 + Depreciation Expense for 20X3

= $8,750 + $8,750 + $8,750

= $26,250

Book Value on December 31, 20X3 = Cost - Accumulated Depreciation for 3 years

= $74,000 - $26,250

= $47,750

0 0
Add a comment
Know the answer?
Add Answer to:
On January 1, 20X1, Emily’s Boutique purchased equipment for $74,000 which is expected to have a...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Kansas Enterprises purchased equipment for $74,000 on January 1, 2021. The equipment is expected to have...

    Kansas Enterprises purchased equipment for $74,000 on January 1, 2021. The equipment is expected to have a ten-year service life, with a residual value of $6,300 at the end of ten years. Using the straight-line method, the book value at December 31, 2021, would be: Multiple Choice $67,230. 0 $67,700. 0 $66,600. 0 $60,930.

  • Company C started business on January 1, 20X1, and bought the following piece of equipment. Cost...

    Company C started business on January 1, 20X1, and bought the following piece of equipment. Cost of asset $200,000 Salvage 20,000 Useful life 5 Tax rate 21% 20X1 estimated tax payment 4,000 Depreciation for book and tax purposes is as follows: Book Tax 20X1 36,000 80,000 20X2 36,000 48,000 20X3 36,000 28,800 20X4 36,000 17,280 20X5 36,000 5,920 20X1 income statement information: Sales 362,000 Expenses (does not include depreciation expense and tax expense) 217,000 What is the ending balance of...

  • Company D started business on January 1, 20X1, and bought the following piece of equipment. Cost...

    Company D started business on January 1, 20X1, and bought the following piece of equipment. Cost of asset $300,000 Salvage 30,000 Useful life 5 Tax rate 21% 20X1 estimated tax payment 6,000 Depreciation for book and tax purposes is as follows: Book Tax 20X1 54,000 120,000 20X2 54,000 72,000 20X3 54,000 43,200 20X4 54,000 25,920 20X5 54,000 8,880 What is the ending balance of deferred taxes payable-depreciation on the December 31, 20X3 balance sheet? (You do not need income statement...

  • Company C started business on January 1, 20X1, and bought the following piece of equipment. Cost...

    Company C started business on January 1, 20X1, and bought the following piece of equipment. Cost of asset $700,000 Salvage 70,000 Useful life 5 Tax rate 21% 20X1 estimated tax payment 14,000 Depreciation for book and tax purposes is as follows: Book Tax 20X1 126,000 280,000 20X2 126,000 168,000 20X3 126,000 100,800 20X4 126,000 60,480 20X5 126,000 20,720 20X1 income statement information: Sales 1,267,000 Expenses (does not include depreciation expense and tax expense) 760,000 What is the ending balance of...

  • 1) Kansas Enterprises purchased equipment for $79,000 on January 1, 2021. The equipment is expected to...

    1) Kansas Enterprises purchased equipment for $79,000 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value of $6,900 at the end of five years. Using the straight-line method, depreciation expense for 2021 would be: 2) Kansas Enterprises purchased equipment for $80,500 on January 1, 2021. The equipment is expected to have a ten-year service life, with a residual value of $6,450 at the end of ten years. Using the straight-line method,...

  • On January 1, 20X1, Local Bakery started operations. The company acquired a piece of equipment by...

    On January 1, 20X1, Local Bakery started operations. The company acquired a piece of equipment by issuing a note payable on that date. The note had a below market rate of interest. Terms of the purchase of the equipment: Coupon rate Market rate Note payable $200,000 1.30% 5.90% Note term 6 years The note is due in equal annual payments of principle and interest. The company uses straight-line depreciation for book purposes. Depreciation information on the equipment: Useful life of...

  • On January 1, 20X1, Local Bakery started operations. The company acquired a piece of equipment by...

    On January 1, 20X1, Local Bakery started operations. The company acquired a piece of equipment by issuing a note payable on that date. The note had a below market rate of interest. Terms of the purchase of the equipment: Coupon rate Market rate Note payable $165,000 1.65% 4.70% Note term 6 years The note is due in equal annual payments of principle and interest. The company uses straight-line depreciation for book purposes. Depreciation information on the equipment: Useful life of...

  • Suppose FastShip purchased equipment on January 1, 2018, for $48,000. The expected useful life of the...

    Suppose FastShip purchased equipment on January 1, 2018, for $48,000. The expected useful life of the equipment is 10 years or 400,000 units of protection, and its residual value is $8,000. FastShip prepared the following analysis of two depreciation methods: Data Table Method B: Double-Declining-Balance Annual Depreciation Accumulated Year Expense Depreciation Method A: Straight-Line Annual Depreciation Accumulated Expense Depreciation Book Value $ 48,000 4,000 $ 4,000 44,000 4,000 8,000 40,000 4,000 12,000 36,000 Start Book Value $ 48,000 38,400 30,720...

  • On January 1, 20X1, the Holloran Corporation purchased a machine at a cost of $55,000. The...

    On January 1, 20X1, the Holloran Corporation purchased a machine at a cost of $55,000. The machine was expected to have a service life of 10 years and a $5,000 residual value. The straight-line depreciation method was used. In 20X3, the company switched to the double-declining-balance depreciation method. Depreciation for 20X3 should be: Multiple Choice $12,750 $10,000 $11,250 $8,500

  • On January 1, 20X1, Company XYZ started operations. The company acquired a piece of equipment by...

    On January 1, 20X1, Company XYZ started operations. The company acquired a piece of equipment by issuing a note payable on that date. The note had a below market rate of interest. Terms of the purchase of the equipment: Coupon rate Market rate Note payable $200,000 1.25% 5.10% Note term 6 years The note is due in equal annual payments of principle and interest. The company uses straight-line depreciation for book purposes. Depreciation information on the equipment: Useful life of...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT