How is the book value of a depreciable asset computed. How does a depreciable asset's book value change from one accounting period to the next. Discuss the difference between the terms book value and fair value.
Explain why you think goodwill is referred to as an ‘‘unidentifiable intangible asset.'' What types of items would be considered ‘‘identifiable intangible assets''. Is there any difference in the annual treatment of identifiable and unidentifiable intangible assets.
Depreciation Methods
Ohio Box Co. purchased a bundling machine on January 1, 2009, for a cost of $22,800. The machine is expected to last 5 years, or bundle 660,000 items, at which time it should have a salvage value of $3,000. A counter on the machine revealed that the machine was used at the following levels: 2009, 110,000 bundles; 2010, 140,000 bundles; 2011, 150,000 bundles; 2012, 141,800 bundles; and 2013, 152,000 bundles."
(a) How much depreciation will be taken each year if the straight-line method of depreciation is used. Show calculations. "