On january 1,2004, reed company purchased a machine for $8,000 and established an annual depreciation charge of $1,000 over an eight-year life. During 2007, after issuing its 2006 financial statements, Reed concluded that the machine suffered permanent impairement of its operational value, and $2,000 is a reasonable estimate of the amount expected to be recovered through use of the machine for the period January 1, 2007, through 31, 2001
In Reed's December 31,2008 balance sheet, the machine should be reported at a carrying amount of?
a. 0
b. 1,000
c. 1,600
d. 4,000
2007-01-29 02:48:47 · 3 answers · asked by Anonymous in Education & Reference ➔ Homework Help
original value 8,000
less depreciation Jan 1, 2004 - Jan 1, 2006 3,000
( 3 years * 1000)
Value as at end of 2006 5,000
Value of mac at the beginning of 2007 2,000
(due to damage, mac was revalued @ 2,000)
Value of mac as at end of 2007 net of dep 1,000
less dep due for 2008 1,000
value of mac as at end of 2008 is 0
the answer therefore is a. 0
2007-02-05 15:00:54 · answer #1 · answered by Cris O 2 · 0⤊ 0⤋
i'm not a accountant
2007-02-05 23:46:24 · answer #2 · answered by ImGodgifted 3 · 0⤊ 1⤋
d.
2007-01-29 03:03:52 · answer #3 · answered by Uncle Red 6 · 0⤊ 0⤋