Equipment was purchased on January 5, 2011, at a cost of $90,000. The equipment had an estimated useful life of 8 years and an estimated residual value of $8,000.
After using the equipment for 3 years, the useful life was revised to a total of 10 years and the residual value was reduced to $2,004.
Determine the straight-line depreciation expense for the year 2014 and following years.
14.Machinery acquired at a cost of $80,000 and on which there is accumulated depreciation of $55,000 (including depreciation for the current year to date) is exchanged for similar machinery. For financial reporting purposes, present entries to record the disposition of the old machinery and the acquisition of new machinery under each of the following assumptions:
(a)price of new, $120,000; trade-in allowance on old, $4,000; balance paid in cash.
(b)Price of new, $120,000; trade-in allowance on old, $34,000; balance paid in cash.