On October 1, 2023, Pharoah Airways Ltd. purchased a new commercial aircraft for a total cost of $108.00 million. Included in thetotal cost are the aircraft's 2 engines, at a cost of $10.80 million each, and the aircraft's body, which costs $86.40 million. Theestimated useful life of each of the aircraft's 2 engines is 10 years, with a residual value of $1.08 million. The estimated useful life of theaircraft's body is 10 years, with a residual value of $5.40 million. The entire aircraft's useful life is limited to the life of the aircraft'sbody.(a) Prepare the journal entries required on October 1, 2023, and December 31, 2023, if Pharoah Airways prepares financialstatements in accordance with IFRS and uses straight-line depreciation. (Credit account titles are automatically indented when the amountis entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debitentries before credit entries.)DateDec. 31, 2023Account Titles and ExplanationAircraft EnginesAircraft - BodyCashDebit21,600,00086,400,000Credit324 000000

Journal entries consist of all the business financial transactions. They are recorded in…

1, 2023, Pharoah Airways Ltd. purchased a new commercial aircraft for a total cost of $108.00 million. Incluc total cost are the aircraft's 2 engines, at a cost of $10.80 million each, and the aircraft's body, which costs $86.40 million. estimated useful life of each of the aircraft's 2 engines is 10 years, with a residual value of $1.08 million. The estimated use aircraft's body is 10 years, with a residual value of $5.40 million. The entire aircraft's useful life is limited to the life of the a body. (a) Prepare the journal entries required on October 1, 2023, and December 31, 2023, if Pharoah Airways prepares financia statements in accordance with IFRS and uses straight-line depreciation. (Credit account titles are automatically indented whe is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List a entries before credit entries.) 4 Account Titles and Explanation Date Dec. 31, 2023 v Aircraft-Engines Debit 21,600,000 Credit

1, 2023, Pharoah Airways Ltd. purchased a new commercial aircraft for a total cost of $108.00 million. Incluc total cost are the aircraft's 2 engines, at a cost of $10.80 million each, and the aircraft's body, which costs $86.40 million. estimated useful life of each of the aircraft's 2 engines is 10 years, with a residual value of $1.08 million. The estimated use aircraft's body is 10 years, with a residual value of $5.40 million. The entire aircraft's useful life is limited to the life of the a body. (a) Prepare the journal entries required on October 1, 2023, and December 31, 2023, if Pharoah Airways prepares financia statements in accordance with IFRS and uses straight-line depreciation. (Credit account titles are automatically indented whe is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List a entries before credit entries.) 4 Account Titles and Explanation Date Dec. 31, 2023 v Aircraft-Engines Debit 21,600,000 Credit

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 13P

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On October 1, 2023, Pharoah Airways Ltd. purchased a new commercial aircraft for a total cost of $108.00 million. Included in the total cost are the aircraft's 2 engines, at a cost of $10.80 million each, and the aircraft's body, which costs $86.40 million. The estimated useful life of each of the aircraft's 2 engines is 10 years, with a residual value of $1.08 million. The estimated useful life of the aircraft's body is 10 years, with a residual value of $5.40 million. The entire aircraft's useful life is limited to the life of the aircraft's body. (a) Prepare the journal entries required on October 1, 2023, and December 31, 2023, if Pharoah Airways prepares financial statements in accordance with IFRS and uses straight-line depreciation. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) 4…
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Surat Limited paid cash to acquire an aircraft on January 1, 2020, at a cost of 30,000,000 rupees. The aircraft has an estimated useful life of 40 years and no salvage value. The company has determined that the aircraft is composed of three significant components with the following original costs (in rupees) and estimated useful lives: Component Cost Useful Life Fuselage 10,000,000 40 years Engines 15,000,000 30 years Interior 5,000,000 20 years 30,000,000 The U.S. parent of Surat does not depreciate assets on a component basis, but instead depreciates assets over their estimated useful life as a whole. Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes. Required: a. Prepare journal entries for this aircraft for the years ending December 31, 2020, and December 31, 2021, under (1) IFRS and (2) U.S. GAAP. b.…
On January 1, 2020, QuickAir Transportation Company purchased a used aircraft at a cost of $64,400,000. QuickAir expects the plane to remain useful for five years (7,000,000 miles) and to have a residual value of $6,400,000. QuickAir expects to fly the plane 925,000 miles the first year, 1,225,000 miles each year during the second, third, and fourth years, and 2,400,000 miles the last year. Read the requirements. 1. Compute QuickAir's depreciation for the first two years on the plane using the straight-line method, the units-of-production method, and the double-declining balance method. a. Straight-line method Using the straight-line method, depreciation is for 2020 and for 2021.
On January 1, 2020, Northeast USA Transportation Company purchased a used aircraft at a cost of $64,400,000. Northeast USA expects the plane to remain useful for five years (6.000,000 miles) and to have a residual value of $6,400,000. Northeast USA expects to fly the plane 725,000 miles the first year, 1,300,000 miles each year during the second, third, and fourth years, and 1,375,000 miles the last year. Read the requirements 1. Compute Northeast USA's depreciation for the first two years on the plane using the straight-line method, the units-of-production method, and the double-declining balance method. a. Straight-line method Using the straight-line method, depreciation is for 2020 and for 2021.
On January 1, 2020, Fast Delivery Transportation Company purchased a used aircraft at a cost of $54,300,000. Fast Delivery expects the plane to remain useful for five years (6,000,000 miles) and to have a residual value of $4,300,000. Fast Delivery expects to fly the plane 835,000 miles the first year, 1,425,000 miles each year during the second, third, and fourth years, and 890,000 miles the last year. Read the requirements, 1. Compute Fast Delivery's depreciation for the first two years on the plane using the straight-line method, the units-of-production method, and the double-declining balance method. a. Straight-line method Using the straight-line method, depreciation is THE .. O. for 2020 and 22222 O N PEN for 2021. 4
Indigo Corp. purchased machinery for $312,000 on May 1, 2023. It is estimated that it will have a useful life of 10 years, residual value of $12,000, production of 300,000 units, and 25,000 working hours. The machinery will have a physical life of 15 years and a salvage value of $3,000. During 2024, Indigo used the machinery for 2,300 hours and the machinery produced 26,000 units. Indigo prepares financial statements in accordance with IFRS. From the information given, calculate the depreciation charge for 2024 under each of the following methods, assuming Indigo has a December 31 year end. (a) Calculate the depreciation charge for 2024 under straight-line method. Depreciation charge for 2024 $enter the depreciation charge for 2024 in dollars (b) The parts of this question must be completed in order. This part will be available when you complete the part above. (c) The parts of this question must be completed in order. This part will be available when you complete the part above. (d)…
On January 1, 2017, Northeast USA Transportation Company purchased a used aircraft at a cost of $52,300,000. Northeast USA expects the plane to remain useful for five years (7,300,000 miles) and to have a residual value of $4,300,000. Northeast USA expects to fly the plane 875,000 miles the first year, 1,350,000 miles each year during the second, third, and fourth years, and 2,375,000 miles the last year. Read the requirements. 1. Compute Northeast USA's depreciation for the first two years on the plane using the straight-line method, the units-of-production method, and the double-declining balance method. a. Straight-line method Using the straight-line method, depreciation is $ 9,600,000 for 2017 and $ 9,600,000 for 2018. b. Units-of-production method (Round the depreciation per unit of output to two decimal places to compute your final answers.) Using the units-of-production method, depreciation is $ 5,757,500 for 2017 and $ 8,883,000 for 2018. c. Double-declining balance method…
On January 1, 2017, Northeast Transportation Company purchased a used aircraft at a cost of $58,900,000. Northeast expects the plane to remain useful for five years (7,200,000 miles) and to have a residual value of $4,900,000. Northeast expects to fly the plane 750,000 miles the first year, 1,375,000 miles each year during the second, third, and fourth years, and 2,325,000 miles the last year. Read the requirements. 1. Compute Northeast's depreciation for the first two years on the plane using the straight-line method, the units-of-production method, and the double-declining balance method. a. Straight-line method Using the straight-line method, depreciation is $ for 2017 and $ for 2018.
Surat Limited paid cash to acquire an aircraft on January 1, 2020, at a cost of 30,000,000 rupees. The aircraft has an estimated useful life of 40 years and no salvage value. The company has determined that the aircraft is composed of three significant components with the following original costs (in rupees) and estimated useful lives: Component Fuselage Engines Interior Cost 10,000,000 15,000,000 5,000,000 30,000,000 The U.S. parent of Surat does not depreciate assets on a component basis, but instead depreciates assets over their estimated useful life as a whole. Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore Income taxes. Required: a. Prepare journal entries for this aircraft for the years ending December 31, 2020, and December 31, 2021, under (1) IFRS and (2) U.S. GAAP. b. Prepare the entry(les) that the U.S. parent would make on the December 31,…
On January 1, 2020, the ROSAS Company bought a machinery costing P1,000,000. The useful life is expected to be 10 years. On July 1, 2025, the machine's engine was replaced at a total cost of P320,000. This replacement will extend the useful life of the asset by an additional 5.5 years from the date of replacement. The old engine of the machine had a cost of 250,000. The loss on replacement is
In August 2024, Carla Vista Helicopters Ltd. purchased a new helicopter for its logging and heavy lift operations at a cost of $1.05 million. Based on past experience, management has determined that the helicopter will have a useful life of 18,000 flying hours, at which time it will have an estimated residual value of $150,000. During 2024, the helicopter was used for 1,800 flying hours, and in 2025 it was used for 2,000 flying hours. Carla Vista Helicopters has a December 31 year end and uses the units-of-production method of depreciation for its helicopters. Determine the depreciation expense on this helicopter for 2025 and its carrying amount at December 31, 2025. Depreciation expense $ Carrying amount $ 2025