On January 1,2011.Hula Hoops,Inc.purchased a $40,000 machine for cash.The company uses straight-line depreciation,an estimated useful life of 5 years,and a $2,000 salvage value.
Treat each of the following scenarios independently.For each,write in the amount in the column that represents the one financial statement where the amount is found.Round your answers to the nearest whole dollar.The company's yearend is December 31.
Part A: On December 31,2011,the company was told by an appraiser that the machine is in such great condition it could be sold for $38,000.
Part B: In December 2012,the company decided that the machine's original estimated useful life of 5 years should be revised to a total of 8 years since the machine is in such good condition.Salvage value is still $2,000.

Question

On January 1,2011.Hula Hoops,Inc.purchased a $40,000 machine for cash.The company uses straight-line depreciation,an estimated useful life of 5 years,and a $2,000 salvage value.
Treat each of the following scenarios independently.For each,write in the amount in the column that represents the one financial statement where the amount is found.Round your answers to the nearest whole dollar.The company's yearend is December 31.
Part A: On December 31,2011,the company was told by an appraiser that the machine is in such great condition it could be sold for $38,000.
  Part B: In December 2012,the company decided that the machine's original estimated useful life of 5 years should be revised to a total of 8 years since the machine is in such good condition.Salvage value is still $2,000.

Quizplus · Accepted Answer

The Answer of On January 1,2011.Hula Hoops,Inc.purchased a $40,000 machine for cash.The company uses straight-line depreciation,an estimated useful life of 5 years,and a $2,000 salvage value.
Treat each of the following scenarios independently.For each,write in the amount in the column that represents the one financial statement where the amount is found.Round your answers to the nearest whole dollar.The company's yearend is December 31.
Part A: On December 31,2011,the company was told by an appraiser that the machine is in such great condition it could be sold for $38,000.
  Part B: In December 2012,the company decided that the machine's original estimated useful life of 5 years should be revised to a total of 8 years since the machine is in such good condition.Salvage value is still $2,000.