Depreciation continues to be one of the most controversial, difficult and important areas of accounting. Elias purchased a computer for business use at his establishment. He asked your assistance for the requirements for depreciation. Advise Elias on which one of the below is required or are requirements for calculating depreciation. a. Establishing the depreciation base b. Estimating the useful life c. All of those listed. d. Choosing a depreciation method

Depreciation continues to be one of the most controversial, difficult and important areas of accounting. Elias purchased a computer for business use at his establishment. He asked your assistance for the requirements for depreciation. Advise Elias on which one of the below is required or are requirements for calculating depreciation. a. Establishing the depreciation base b. Estimating the useful life c. All of those listed. d. Choosing a depreciation method

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

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 4C: Depreciation continues to be one of the most controversial, difficult, and important problem areas...

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The Home Depot financial statements appear in Appendix A at the end of this textbook. Use thesestatements to answer the following questions and indicate where in the financial statements youfound the information. a. What depreciation method does Home Depot use for buildings, furniture, fixtures, and equip-ment? What are the useful lives over which these assets are depreciated? b. From the notes to Home Depot ’s financial statements, what can you learn about the company’spolicy regarding impairment of plant assets?c. Locate Home Depot ’s balance sheet and find the section entitled “Property and Equipment, atcost.” As of January 31, 2010, determine the amount of the company’s investment in propertyand equipment and the amount of depreciation taken to date on those assets. Are these assets,taken as a whole, near the beginning or end of their estimated useful lives? Explain your answer.
Describe the purchase of an item of Property, Plant and Equipment so that your peers can determine depreciation for that first year using both the Straight-Line Method and the Units of Activity Method. Then describe the sale of that item at the end of it's life so that your peers can determine if there was a gain or loss on disposal. Note please see below as I have included some examples. The information and amounts can be made up but it needs to follow the guidelines above.
In this session, we discuss property acquisitions and dispositions. In financial accounting, the acquisition of assets means that specific procedures will be followed, including computing the depreciable cost of the asset and estimating its useful life. These steps are required to compute the depreciation for the acquired asset. The accounting treatment options vary including the use of Straight Line, Units of Production, or an accelerated method such as Declining Balance or Sum of the Years’ digits. (Heintz & Parry, 2017) If the asset is later sold before being fully depreciated, there may be an accounting gain or loss on disposal, depending on the circumstances. If assets are disposed of under the tax code, such disposal might trigger depreciation recapture. The deductions allowed under section 1231 allow for tax savings while reducing the taxpayer basis in the asset. Such a reduction in basis might be connected to a realized gain on the disposal of such an asset and allow the…
Looking for answers asap. Please inlcude the calculations for my reference. Thanks! The type of depreciation for all the clauses is straight-line method. Analyze and review the following items and determine the appropriate journal entry.
How do I create a new fixed asset account with an account type: Fixed Asset, detail type: Machinery & Equipment, name: Equipment and track deprecciation of this asset in QuickBooks? When I go to the Chart of Accounts to create a new account, I get the attached photo. There's no where to check the "track depreciation" check box.
Illustrate the rules and laws that govern asset depreciation and the methods that accountants use to allocate the depreciation expenses?
I need help with this journal entry, I have it partially correct but I'm not sure how to record the new accumulated depreciation and what numbers to use.
Place T or F in front of each of the following statements. 1. The straight-line method of depreciation is based on the assumption that depreciation expense can be regarded as a constant function of time. 2. Plant assets should be written down (below cost) when their market value has declined temporarily. 3. The accounting profession has developed specifically recommended procedures for recording appraisal increases with respect to plant assets. 4. An asset's cost minus its accumulated depreciation equals its book value. 5. The sum-of-the-years'-digits method of depreciation ignores salvage value in the computation of an asset's depreciable base. 6. When using the double-declining balance method of determining depreciation, a declining percentage is applied to a constant book value. 7. The book value of plant assets initially declines more rapidly under decreasing-charge methods than under the straight-line method. 8. Accounting depreciation is computed by…
Why do we need to depreciate our property, plant, and equipment? (Discuss also the treatment of depreciation expense in the financial statements.) Please don't copy paste answers you will provide. Make it original thank you.
Tom Parkey has prepared the following list of statements about depreciation. 1. Depreciation is a process of asset valuation, not cost allocation.2. Depreciation provides for the proper recording of expenses (efforts) with revenues (results).3. The book value of a plant asset should approximate its fair value.4. Depreciation applies to three classes of plant assets: land, buildings, and equipment.5. Depreciation does not apply to a building because its usefulness and revenue-producing ability generally remain intact over time.6. The revenue-producing ability of a depreciable asset will decline due to wear and tear and to obsolescence.7. Recognizing depreciation on an asset results in an accumulation of cash for replacement of the asset.8. The balance in the Accumulated Depreciation account represents the total cost that has been charged to expense since placing the asset in service.9. Depreciation expense and accumulated depreciation are reported on the income statement.10. Four…
What is depreciation? Why are depreciation methods important in the business arena? Explain the differences among the depreciation methods covered in chapter 10. Based on your evaluation, what is the best method of depreciation and why? What is the least used and Why?
• Topic 1: Describe the Straight-line depreciation method. Create a business example of a fixed asset being depreciated using the Straight-line depreciation method. Show the depreciation calculation for the first three years using the straight-line depreciation method. Describe what the graph would look like for the Straight- line depreciation method.