. Mr. Ron acquired machinery for use in his business. After a strong typhoon, the machinery suffered partial damage. The following data are made available: Cost P 500,000 Accumulated depreciation 300,000 Restoration cost 250,000 Estimated remaining life 5 years How much is the new basis of depreciation?

. Mr. Ron acquired machinery for use in his business. After a strong typhoon, the machinery suffered partial damage. The following data are made available: Cost P 500,000 Accumulated depreciation 300,000 Restoration cost 250,000 Estimated remaining life 5 years How much is the new basis of depreciation?

Name: . Mr. Ron acquired machinery for use in his business. After a strong
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Description: . Mr. Ron acquired machinery for use in his business. After a strong typhoon, themachinery suffered partial damage. The following data are made available:CostP 500,000Accumulated depreciation300,000Restoration cost250,000Estimated remaining life5 ye

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter18: Accounting For Long-term Assets

Section: Chapter Questions

Problem 4CE: Grandorf Company replaced the engine in a truck for 8,000 and expects the new engine will extend the...

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Grandorf Company replaced the engine in a truck for 8,000 and expects the new engine will extend the life of the truck two years beyond the original estimated life. Related information is provided below. Cost of truck 65,000 Salvage value 5,000 Original estimated life 6 years The truck was purchased on January 1, 20-1. The engine was replaced on January 1, 20-6. Using straight-line depreciation, compute depreciation expense for 20-6.
Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an estimated useful life of four years or 100,000 hours, and a salvage value of 30,000. This machine will be used 30,000 hours during Year 1, 20,000 hours in Year 2, 40,000 hours in Year 3, and 10,000 hours in Year 4. With DEPREC5 still on the screen, click the Chart sheet tab. This chart shows the accumulated depreciation under all three depreciation methods. Identify below the depreciation method that each represents. Series 1 _____________________ Series 2 _____________________ Series 3 _____________________ When the assignment is complete, close the file without saving it again. Worksheet. The problem thus far has assumed that assets are depreciated a full year in the year acquired. Normally, depreciation begins in the month acquired. For example, an asset acquired at the beginning of April is depreciated for only nine months in the year of acquisition. Modify the DEPREC2 worksheet to include the month of acquisition as an additional item of input. To demonstrate proper handling of this factor on the depreciation schedule, modify the formulas for the first two years. Some of the formulas may not actually need to be revised. Do not modify the formulas for Years 3 through 8 and ignore the numbers shown in those years. Some will be incorrect as will be some of the totals. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Save the completed file as DEPRECT. Hint: Insert the month in row 6 of the Data Section specifying the month by a number (e.g., April is the fourth month of the year). Redo the formulas for Years 1 and 2. For the units of production method, assume no change in the estimated hours for both years. Chart. Using the DEPREC5 file, prepare a line chart or XY chart that plots annual depreciation expense under all three depreciation methods. No Chart Data Table is needed; use the range B29 to E36 on the worksheet as a basis for preparing the chart if you prepare an XY chart. Use C29 to E36 if you prepare a line chart. Enter your name somewhere on the chart. Save the file again as DEPREC5. Print the chart.
Which of the following is not true about the MACRS depreciation system: A salvage value must be determined before depreciation percentages are applied to depreciable real estate. Residential rental buildings are depreciated over 27.5 years straight-line. Commercial real estate buildings are depreciated over 39 years straight-line. No matter when during the month depreciable real estate is purchased, it is considered to have been placed in service at mid-month for MACRS depreciation purposes.
The “Big-Deal” Company has purchased new furniture for their offices at a retail price of $125,000. An additional $20,000 has been charged for insurance, shipping, and handling. The company expects to use the furniture for 10 years (useful life = 10 years) and then sell it at a salvage (market) value of $15,000. Use the SL method of depreciation to answer these questions. Solve, a. What is the depreciation during the second year? b. What is the BV of the asset at the end of the first year? c. What is the BV of the asset after 10 years?
The “Big-Deal” Company has purchased new furniture for their offices at a retail price of $125,000. An additional $20,000 has been charged for insurance, shipping, and handling. The company expects to use the furniture for 10 years (useful life = 10 years) and then sell it at a salvage (market) value of $15,000. Use the SL method of depreciation to answer these questions.
On January, 1, Year One, Richards Ice Cream Shoppe acquired a new machine which willmake their popular product faster and creamier. Mary, the owner, spent $10,000 on themachine. Mary also paid $500 to ship the equipment, $350 to install, $750 to train employees,and $1,000 to market their improved product to customers. The machine is estimatedto have an 8-year useful life and a salvage value of $1,000. Mary uses straight-line depreciation. The historical cost of the asset recorded in the books is: Question 2 The depreciable base of the asset is: Question 3 The depreciation expense to be recorded in Year 1 is: Question 4 The depreciation expense to be recorded in Year 4 is: Question 5 The netbook value of the asset at the end of Year 1 is: Question 6 The netbook value of the asset at the end of Year 4 is:
Queen Restaurant purchased huge electric griller equipment amounting to P1,300,000. When the electric griller was permanently retired from use, the accumulated depreciation was P490,000 and has a salvage value of P70,000. How much is the deductible loss from permanent retirement?
Company I purchased a piece of land for its natural resources at a cost of $1,500,000. The land is expected to have a salvage value of $250,000. A lumber expert visited the property and estimated the property to have 500,000 pounds of timber. The first year, the company logged 350,000 pounds of timber, and the second year, another 250,000 pounds of timber were logged. Calculate the depletion expense rate AND calculate the depletion expense the company should recognize in Year 1 and Year 2:
A firm is trying to decide whe ther to keep an item of construction equipmentanother year. The firm is using the DOB method for book purposes. and this is the fourth year of ownership of the equipment. The item cost $220.000 when it was new. What is the depreciation in year three? Assume that the depreciable life of the equipme nt is eight years. with zero salvage value.
Bright Company purchased factory equipment which was installed and put into service January 3, 2002 at a total cost of P1,280,000. Salvage value was estimated at P80,000. The equipment is being depreciated over 8 years by the double declining balance method. For the year 2003, how much depreciation expense should Bright record on this equipment?A. P225,000B. P240,000C. P300,000D. P320,000
Does land depriciable or not explain with proper reason suppose business purchase a machine for $12000 they have estimated useful life of the machine to 9 years salvage value of $2000 measure annual depreciation cost using straight line method
ABC Corporation owns a building that has an area of 5,000 square meters.The revaluation of this asset was made based on the following: Particulars Square Meters Replacement Costper Square Meter Walls 300 4500 Office Floor Space 800 3000 Pipes, Wirings, AC Area 400 5600 ABC has depreciated the building for 25% of its life to a salvage value of P500,000.What is the sound value of this building? a. P1,497,500 b. P1,587,500 c. 1,372,500 d. 1,462,500