Exam 16: Accounting for Property, Plant, Equipment, and Intangible Assets

Chocolate Supreme purchased new baking equipment for $15,000 subject to terms 4/10, n/45. The discount was taken. Additional costs included sales tax $900 and installation $300. The total cost to be added to the machinery account is:

Assume an asset costing $72,000 is expected to produce 400,000 units and have a salvage value of $6,000. During year 1, 75,000 units were produced; during year 2, 68,000 units were produced; and during year 3, 70,000 units were produced. Using units-of-production, compute the depreciation expense for each of the three years.

Capital expenditures would include:

Define and compare capital expenditures and revenue expenditures.

To calculate the double-declining-balance rate, you would divide 2 by the number of years of useful life.

Two depreciation methods that ignore the salvage value are ________ and ________.

What would the depreciation expense be in year 3 for a computer system using the straight-line method when cost is $5,000, residual value is $1,000, and the expected life is 4 years?