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Allushta [10]
3 years ago
6

Borel Inc., a calendar year company, purchased on June 29, 2019 a tractor trailer for transporting racehorses. The cost of the t

railer was $200,000 and is estimated to have a useful life of five years and salvage value is to be ignored. What would be the depreciation expense during the entire useful life of the asset
Business
2 answers:
tamaranim1 [39]3 years ago
8 0

Answer:

In the first year 2019, the depreciation expense would be $20,000.

From 2020 to 2023, the depreciation expense would be $40,000 and then $20,000 in 2024.

Explanation:

Depreciation is the systematic allocation of the cost of an asset to the income statement over the estimated useful life of that asset.

It is determined as the depreciable value of the asset over the estimated useful life of the asset where the depreciable value is the difference between the cost and salvage value of the asset

Mathematically,  

Depreciation = (Cost - Salvage value)/Estimated useful life

Annual depreciation

= $200,000/5

= $40,000

In the first year 2019, the depreciation expense would be

= 1/2 * $40,000

= $20,000

From 2020 to 2023, the depreciation expense would be $40,000 and then $20,000 in 2024

Sergeeva-Olga [200]3 years ago
3 0

Answer:

The depreciation expense during the entire useful life of the asset is simply the same as the cost of the asset, which is $200,000. This is because there was no salvage value. The following journals apply:

Debit Depreciation expense                              $200,000

Credit Accumulated depreciation                     $200,000

<em>(To record accumulated depreciation for the entire life of the asset)</em>

Explanation:

There are varying methods of calculating depreciation expense like straight-line, double-declining or the unit-of-production method. The most commonly used is the straight-line method. Under this method, depreciation is an allocation of the cost of an asset over its estimated useful life and it is expressed with this formula: (cost - residual value) / No of years = ($200,000 - 0) / 5 years = $40,000 yearly depreciation expense.

Accumulated depreciation for 5 years is $40,000 x 5 years $200,000.

So, the net book value (NBV) of the asset (expressed as Cost - Accumulated depreciation) is $200,000 - $200,000 = $0.

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Advocard [28]

Answer:

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Current market price = <u>Quarterly dividend</u>

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3 years ago
Which of the following statements is true in a capitalist economy?
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​Aylward, Inc. currently has $2,141,000 in current assets and $842,000 in current liabilities. The company’s managers want to in
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Answer:

$240,500

Explanation:

We know that

Current ratio = Total Current assets ÷ total current liabilities

= $2,141,000 ÷ $842,000

= 2.5 times

For current ratio falling below 2.2, we have to assume the borrowed amount be X

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$2,141,000+ X = 2.2 × ($842,000 + X)

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