40. A manufacturing firm purchased used equipment for $135,000.
The original owners estimated that the residual value of the
equipment was $10,000. The carrying amount of the equipment was
$120,000 when ownership transferred. The new owners estimate that
the expected remaining useful life of the equipment was 10 years,
with a salvage value of $15,000. What amount represents the
depreciable base used by the new owners?
41. What is the total R & D cost that will be expensed when incurred?
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ACC 422 Week 3 DQ 1
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Week 3 – DQ 1
What is the purpose of depreciation?
Does the book value of a fixed asset (cost minus accumulated
depreciation) communicate to a user what the asset is worth? Explain
why or why not.
Should the financial statements reflect the value of fixed assets?
Explain why or why not.
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ACC 422 Week 3 DQ 2
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Week 3 – DQ 2
What are the different methods used to calculate depreciation?
How does a company decide which method it should utilize?
How does its choice affect the financial statements?