Frankel Feed Purchased a New Machine on January 1,2010,relevant Information

question 121

Short Answer

Frankel Feed purchased a new machine on January 1,2010,relevant information is as follows:
$$\begin{array} { l r } \text { Cost when acquired } & \$ 26,000 \\\text { Estimated residual value } & 2,000 \\\text { Estimated useful life } & 10 \text { years } \\\text { Accumulated depreciation at the end of year } 5 & \\\text { (assume straight-line depreciation) } & 12,000\end{array}$$ It is now the beginning of year 6 and the management reevaluated the estimates related to the machine.Compute the depreciation expense for year 6 under each of the following independent cases: $$\begin{array} { ll} Case & Event \\A& \text { The estimated total useful life is changed to 15 years, residual value is unchanged.}\\B& \text { The residual value is changed to \$ 1,000; useful life unchanged.}\\C & \text { The estimated total useful life is changed to 7 years and the residual value is changed to \$ 3,000} \\\end{array}$$

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Definitions:

ROI

Return on Investment (ROI) measures the gain or loss generated on an investment relative to the amount of money invested.

Multi-Dimensional Performance Reporting

A comprehensive approach to performance measurement that considers various factors beyond financial metrics to evaluate an organization's overall performance.

Financial Results

The outcome of a company's activities in numerical terms over a specific period, often presented in income statements, balance sheets, and cash flow statements.

Cause and Effect Relationships

The principle that every effect has a specific and predictable cause, commonly applied in scientific and logical analysis.