Use the Information That Follows Concerning Harrahs, Inc

question 65

Essay

Use the information that follows concerning Harrahs, Inc. to answer problems 22 through 24.
Harrahs Corporation purchased a dump truck at the beginning of 2008 at a cost of $60,000. The truck had an estimated life of 5 years and an estimated residual value of $5,000. On January 1, 2010, the company made major repairs of $3,000 to the truck that extended its life 2 more years. Starting with 2010, the truck has a remaining life of 5 years. The company uses the straight-line depreciation method.
-What amount should be recorded as depreciation expense each year starting in 2010?

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Definitions:

Operating Activities

Operating Activities involve the primary activities a company engages in to generate income, including production, sales, and delivery of its product or service.

Investing Activities

Transactions related to buying or selling long-term assets and investments other than cash equivalents.

Financing Activities

These involve transactions related to raising capital and repaying investors, such as issuing shares and obtaining loans, covered in the cash flow statement.

Cash Dividend

A cash dividend is a payment made by a company out of its earnings to shareholders, usually in the form of cash.