On January 1, 2014, Check Co

question 75

Essay

On January 1, 2014, Check Co. bought a machine for $15,000. Residual value was estimated to be $1,400 and a five-year life was used for straight-line depreciation. On January 1, 2016, it was estimated that the total life from acquisition date should have been six years and residual value should have been estimated at $600.
Required:
Compute depreciation expense for 2016.

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Definitions:

Profit Statements

Financial statements that summarize the revenues, costs, and expenses incurred during a specific period of time, showing the company's net earnings or losses.

Executor

An individual or institution appointed by a will to administer the estate of the deceased.

Right of Survivorship

A legal principle that allows ownership of property to automatically pass to surviving owners upon the death of another owner, without the need for probate.

Articles of Partnership

A document that outlines the terms and conditions under which a partnership operates, including the rights and responsibilities of each partner.