Asked by rufyjane stephen manuere on May 10, 2024
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The Cardell Company purchased a machine on January 2, 2010, at a cost of $1, 200, 000.The machine had an estimated useful life of eight years and a residual value of $120, 000.Cardell computes depreciation by the sum-of-the-years'-digits method.What amount, net of accumulated depreciation, will appear on the company's December 31, 2012, balance sheet for this machine?
A) $ 570, 000
B) $ 630, 000
C) $ 805, 094
D) $1, 080, 000
Sum-Of-The-Years'-Digits Method
An accelerated depreciation method that computes annual depreciation by multiplying the depreciable cost of an asset by a series of fractions based on the sum of the asset's useful life digits.
Accumulated Depreciation
The total amount of depreciation expense that has been recorded for an asset since it was acquired, representing the reduction in value over time.
- Analyze the effects of depreciation on financial statements and asset valuation.
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Learning Objectives
- Analyze the effects of depreciation on financial statements and asset valuation.
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