Cameron Co

question 52

Essay

Cameron Co. began operations on January 1, 2008, at which time it acquired depreciable assets of $100,000. The assets have an estimated useful life of ten years and no salvage value.
In 2011, Cameron Co. changed from the sum-of-the-years'-digits depreciation method to the straight-line depreciation method.
Required:
Determine the depreciation expense for 2011 and prepare the appropriate journal entry.

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Definitions:

Reserve Requirement

Central bank regulations regarding the minimum amount of reserves that commercial banks must hold against deposits.

Margin Requirements

The minimum amount of equity that must be maintained in a margin account as mandated by brokers or exchanges.

Discount Rate

The interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility.

Money Market Instruments

Short-term financial instruments that are highly liquid and designed for cash management by investors, including treasury bills, commercial paper, and certificates of deposit.