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bonufazy [111]
3 years ago
9

Santayana Company purchased a machine on January 1, 2011, for $20,000 with an estimated salvage value of $5,000 and an estimated

useful life of 8 years. On January 1, 2013, Santayana decides the machine will last 12 years from the date of purchase. The salvage value is still estimated at $5,000. Using the straight-line method, the new annual depreciation will be __________.
Business
1 answer:
Aliun [14]3 years ago
8 0

Answer:

$1,125

Explanation:

Given that,

Cost of machine = $20,000

Estimated salvage value = $5,000

Estimated useful life = 8 years

Depreciation refers to the reduction in the value of the fixed assets of a particular company with the passage of time.

Here, we are using the straight line method,

Annual depreciation is as follows:

= (Cost of machine - Salvage value) ÷ Estimated useful years

= ($20,000 - $5,000) ÷ 8

= $1,875

Depreciation amount for the year 2011 = $1,875

Depreciation amount for the year 2012 = $1,875

Therefore, the book value of the machine at the beginning of January 1, 2013 is as follows:

= Cost of machine - Depreciation amount for the year 2011 - Depreciation amount for the year 2012

= $20,000 - $1,875 - $1,875

= $16,250

Now, the Santayana decides the machine will last 12 years from the date of purchase and we have already deduct the depreciation for the 2 years. So, we need to consider only 10 years for calculating the new annual depreciation.

Salvage value remains the same.

New annual depreciation:

= (Book value at the beginning of 2013 - Salvage value) ÷ Useful life

= ($16,250 - $5,000) ÷ 10

= $11,250 ÷ 10

= $1,125

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Answer:

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Explanation:

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7 0
3 years ago
Sheffield Company has $145,000 of inventory at the beginning of the year and $131,000 at the end of the year. Sales revenue is $
notka56 [123]

Answer:

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<h3 />

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3 years ago
As the information technology advances and consumers buy products requiring more and more technology, the wages of people with h
Katyanochek1 [597]

Answer:

b. increase as the demand for high tech skills increases.

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Due to the fact that the demand for technological products is increasing, the demand for people who possess high tech skills would also increase as firms would want to provide more tech products to satisfy the demand of consumers.

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I hope my answer helps you

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