At December 31, 2023, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances as follows: Accumulated Depreciation and Amortization Category Land Land improvements Buildings Equipment Automobiles and trucks Leasehold improvements Plant Asset $ 185,000 2,000,000 1,625,000 182,000 236,000 Depreciation methods and useful lives: Buildings-150% declining balance; 25 years. Equipment Straight line; 10 years. 438,502 327,500 110,325 118,000 Automobiles and trucks-200% declining balance; 5 years, all acquired after 2020. Leasehold improvements-Straight line. Land improvements-Straight line. Depreciation is computed to the nearest month and residual values are immaterial. Transactions during 2024 and other information:
At December 31, 2023, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances as follows: Accumulated Depreciation and Amortization Category Land Land improvements Buildings Equipment Automobiles and trucks Leasehold improvements Plant Asset $ 185,000 2,000,000 1,625,000 182,000 236,000 Depreciation methods and useful lives: Buildings-150% declining balance; 25 years. Equipment Straight line; 10 years. 438,502 327,500 110,325 118,000 Automobiles and trucks-200% declining balance; 5 years, all acquired after 2020. Leasehold improvements-Straight line. Land improvements-Straight line. Depreciation is computed to the nearest month and residual values are immaterial. Transactions during 2024 and other information:
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Step 1: Depreciation expense:
VIEWStep 2: Working Notes:
VIEWStep 3: (1) Prepare a schedule analyzing the changes in each of the plant asset accounts during 2024:
VIEWStep 4: Working Notes - Calculation of depreciation and amortization expense for 2024:
VIEWStep 5: (2) Prepare a schedule showing depreciation or amortization expense for year ended Dec 31, 2024:
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