MGMT 20000 Lecture 22: 10/26/18
29 Oct 2018
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Document Summary
A company pays ,200 for equipment, with a useful life of four years. Depreciation expense for the first year is recorded as follows. Estimated service life: 5 years or 100,000 miles. Total hours the equipment is expected to be used: 10,000 hours. Number of hours equipment is used in the first year: 1,500 hours. Depreciation rate per hour=depreciable cost/total hours equipment is expected to be used expected to be used. Intangible assets subject to amortization (those with finite useful life): Intangible assets not subject to amortization (those with indefinite useful life) The original legal life of the patent was. 20 years, and there are 12 years remaining. The company estimates that the useful life of the patent is only 8 more years. Always go based on the estimated life left, not the actual amount left (8 years estimate over 12 years actual) Sale: most common method to dispose of a long-term asset.
