JOHNSON LIFTS- Part 1 of 8

Johnson Lifts is another elevator-manufacturing firm based in Lethbridge, Alberta. On January 1, 2020, Johnson Lifts purchased the same gear machine for its own plant from Montanari Giulio. The final acquisition cost for Johnson for the machine is $144,000. The CEO of Johnson lifts estimates the useful life of the machine to be 12 years and the salvage value to be $21,000. The financial year-end of the company is December 31st.

Answer the following based on the above information on Johnson Lifts.

The CEO is calculating the machine’s depreciation expenses assuming that the company chooses the straight-line depreciation method.

Do not use symbols like $ or %, or text such as million, in your answers.
Round to two decimal points.

What is the accumulated depreciation using the straight-line depreciation method at the end of 2023, after recognizing depreciation for 2023?

Question

JOHNSON LIFTS- Part 1 of 8

Johnson Lifts is another elevator-manufacturing firm based in Lethbridge, Alberta. On January 1, 2020, Johnson Lifts purchased the same gear machine for its own plant from Montanari Giulio. The final acquisition cost for Johnson for the machine is  $144,000. The CEO of Johnson lifts estimates the useful life of the machine to be 12 years and the salvage value to be $21,000. The financial year-end of the company is December 31st.

Answer the following based on the above information on Johnson Lifts.

The CEO is calculating the machine’s depreciation expenses assuming that the company chooses the straight-line depreciation method.

Do not use symbols like $ or %, or text such as million, in your answers. 
Round to two decimal points.

What is the accumulated depreciation using the straight-line depreciation method at the end of 2023, after recognizing depreciation for 2023?

BlackTom AI · Accepted Answer

To begin, we identify the key figures for the asset: initial cost 144000, salvage value 21000, and useful life 12 years. The straight-line depreciation per year is calculated by subtracting salvage value from cost and then dividing by the useful life: (144000 - 21000) / 12 = 123000 / 12 = 10250 per year. Next, determine how many years have passed from the acquisition date to the end of 2023. The asset was purchased on January 1, 2020, so depreciation is recorded for full years 2020, 2021, 2022, and 2023, which is 4 years in total. Accumulated depreciation at the end of 2023 equals annual depreciation times the number of years: 10250 × 4 = 41000.00. It is important to verify that the amount is rounded to two decimals as required, which yields 41000.00. If you were to recompute from scratch, you would follow the same steps: confirm depreciation per year, count the number of completed years, and multiply the two numbers to obtain accumulated depreciation. In this scenario, the calculation confirms an accumulated depreciation of 41000.00 by the end of 2023. Also note that the line items should reflect two decimals, matching the instruction to round to two decimal places.

类似问题

Suppose you just bought an asset with a book value of $250,000 that is depreciated using the straight-line method over the project's life of 6 years. The salvage value at the end of the 6 years will be $400. What will be the depreciation expense in year 3?

For a company using the straight-line method of depreciation that changes the estimated useful life from 20 years to 15 years remaining as at the beginning of the year, the accountant should do the following:

Suppose an asset with an initial book value of $250,000 is depreciated via the straight-line method over 7 years to a salvage value of $5,000. What is the depreciation expense in year 3?

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