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Montano1993 [528]
3 years ago
15

Claxton Company purchased a van on January​ 1, 2018, for​ $820,000. The estimated life of the van was five​ years, and its estim

ated residual value was​ $103,000. Claxton uses the​ straight-line method of depreciation. At the beginning of​ 2020, the company revised the total estimated life of the asset from five years to four years. The estimated residual value remained the same as estimated earlier. Calculate the depreciation expense for 2020.
Business
1 answer:
vaieri [72.5K]3 years ago
5 0

Answer:

The depreciation expense for 2020 is $215,100

Explanation:

Given

Claxton Company purchased a van on January​ 1, 2018, for​ $820,000.

Useful life = 5 years

Residual value = $103,000

Annual depreciation = ($820,000- $103,000)/5

                                 = $717,000/5

                                = $143,400

At the beginning of​ 2020, the asset would have been depreciated for 2 years (2018 and 2019)

Net book value = $820,000 - 2($143,400)

                          = $533,200

Since the residual value remains the same after a revision of the estimated useful life from 5 years to 4 years

The asset would only have 2 years left for depreciation.

Annual depreciation = ($533,200 - $103,000)/2

                                  = $430,200/2

                                  = $215,100

         

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You have accumulated $85,000 in student loans that average 5% interest. You graduate next month and will be paying off the loans
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Use the formula of the present value of an annuity ordinary which is
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K compounded monthly 12
N time 10 years
Solve the formula for PMT
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Explanation:

The computation of the inspecting cost is shown below:

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