1) Equipment was purchased on January 1, 2019 for $800,000. At the time of its purchase, the equipment was estimated to have a useful life of five years and a salvage value of $50,000. The equipment was depreciated using the straight- line method of depreciation through 2021. At the beginning of 2022, the estimate of useful life was revised to a total life of eight years and the expected salvage value was changed to $30,000. The amount to be recorded for depreciation for 2022 is?
Q: BLACK JACK Company purchased an automotive equipment on June 30, 2018 for $3,000,000. At the date of…
A: Depreciation formula as per straight line method = (Cost- residual value)/useful life
Q: Equipment was purchased at the beginning of 2019 for P204,000. At the time of its purchase, the…
A: Solution: Original annual depreciation = (Cost - Residual value) / useful life = (P204,000 -…
Q: Sunland Company purchased a machine on July 1, 2020, for $970000. The machine has an estimated…
A: The rate of depreciation under 150% declining balance method is calculated by dividing 150 by the…
Q: On January 1, 2017, Jackson Company purchased a building and equipment that have the following…
A: a. Following are the Journal entry and calculation of depreciation expense on building in 2021:
Q: Parnell Company acquired construction equipment on January 1, 2020, at a cost of $77,400. The…
A: Given information:
Q: Gundrum Company purchased equipment on January 1, 2015 for $920,400. The equipment was expected to…
A: Working Note 1:Compute accumulated depreciation.
Q: A plant asset was purchased on May 1, 2021. The asset had a cost of $54,000, a salvage value of…
A: Formula: Straight line method = ( Cost of Asset - Salvage value ) / Useful life
Q: PIKACHU purchased an equipment for 540,000 on January 1, 2020. The equipment has an estimated…
A: The calculation of depreciable cost has been made as follows: Depreciable cost=Purchase…
Q: On January 2, 2020, VSG purchased a transportation equipment costing P2,400,000. The new asset has…
A: Accumulated depreciation, December 31, 2022 = P2,400,000 x 2/8 = P600,000 Carrying value, December…
Q: e was sold for P26,000. What should be the loss recognized from the sale of the machine?
A:
Q: Equipment was purchased at the beginning of 2019 for $740000. At the time of its purchase, the…
A: Solution: Cost of equipment = $740,000 Initial estimated salvage value = $89,000 Useful life = 6…
Q: On January 1, 2017, RIP Isabel Granada Company purchased a machinery for P600,000, with an estimated…
A: 1. Impairment loss is carrying amount below the recoverable amount. depreciation calculated based…
Q: Bataan Company purchased a machinery that was installed and ready for use on January 1, 2019 at a…
A: Depreciation is an expense which is recorded in the income statement of the firm. There are various…
Q: On Jan. 1, 2020, the construction of a high-tech condominium building was completed for a total cost…
A: Depreciation is the amount of reduction in the cost of the assets due to use of the assets,…
Q: Drago Company purchased equipment on January 1, 2021, at a total invoice cost of $1,200,000. The…
A: working notes: Depreciation = (1,200,000 – 30,000)/5 useful life Total accumulated depreciation (2…
Q: On January 1, 2019, the Ramirez Company ledger shows Equipment $29,000 and Accumulated Depreciation…
A: Straight-line depreciation method: The depreciation method which assumes that the consumption of…
Q: On January 1, 2019, Beldon Inc. purchased a new machine for $60,000. Its estimated useful life is…
A: Double declining balance method is an accelerated method of depreciation where asset is depreciated…
Q: Coronado Industries purchased a machine on July 1, 2020, for $960000. The machine has an estimated…
A: Depreciation means decline in the estimation of benefit inside its valuable life because of mileage…
Q: Parnell Company acquired construction equipment on January 1, 2020, at a cost of $70,100. The…
A: Introduction: A journal entry is being used to record a corporate transaction in the accounting…
Q: Freedom Co. purchased a new machine on July 2, 2019, at a total installed cost of $132,000. The…
A: 1. Depreciation Expenses - Depreciation Expenses are the expense incurred on the wear and tear of…
Q: PIKACHU purchased an equipment for P540,000 on January 1. 2020. The equipment has an estimated…
A: Fixed assets means the asset which is used by company for many years to come for the purpose of…
Q: On January 3, 2019, Soju Co. purchased machinery. The machinery has an estimated useful life of…
A: Sum of the years digits = n(n+1)/2 Sum of the years digits = 8(8+1)/2 Sum of the years digits =…
Q: An equipment costing P375,000 with an eight-year estimated useful life and an estimated residual…
A: Life of equipment = 8 Years Sum of years digits = 8+7+6+5+4+3+2+1 = 36 Cost = P375,000 Salvage value…
Q: The Vladimir Corporation purchased an equipment on January 1, 2020. The machine cost P 92,000, with…
A: Depreciation is used to denote a decrease in the value of fixed assets. Depreciation is the…
Q: An equipment was acquired for P3,000,000 on Jan. 1, 2018. It is being depreciated to a salvage value…
A: Journal entry: An act of recording the daily transaction of a firm in the journal is called journal…
Q: On January 2, 2022, Milk Tea Company acquired a building costing P6,000,000. Milk Tea Company…
A: Impairment Gain: An asset is said to have suffered an impairment if its value has been permanently…
Q: Equipment was purchased at the beginning of 2019 for $870000. At the time of its purchase, the…
A: Yearly depreciation = Cost - Salvage valueEstimated useful life = $870,000 - $102,0006 years =…
Q: Parnell Company acquired construction equipment on January 1, 2020, at a cost of $75,900. The…
A: Cost of equipment $72,000 Expected useful life 6 residual value $15,000 fair value…
Q: SYD method, how much is the depreciation expense
A: Estimated useful life = 5 years Sum of years' digits = 5 + 4 + 3 + 2 + 1 = 15
Q: On October 1, 2022, Blossom Company places a new asset into service. The cost of the asset is…
A: The amount of expense to be charged for the year will be calculated on time basis.
Q: Ariel Company purchased a boring machine on January 1, 2020 for P8,100,000. The useful life of the…
A: Depreciation is the allocation of cost of asset over it's useful life. Units of production is a…
Q: The Harry Corporation purchased a machine on January 1, 2020. The machine cost 46,000, with an…
A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…
Q: On April 1, 2018, Magnum Company purchased a delivery equipment for $88,000, with an expected useful…
A: The depreciation is an expense charged on fixed asset as the reduction in the value of fixed asset…
Q: On July 1, 2019, Ivanhoe Company purchased new equipment for $90,000. Its estimated useful life was…
A: SOLUTION- COMPUTE DEPRECIATION=COST - SALVAGE VALUE / ESTIMATED LIFE…
Q: On January 1, 2019, Ciara Corporation acquired an equipment to be used in its manufacturing…
A: Given information, Useful life =10 years Residual value =P50,000 Depreciation for the year 2021…
Q: Silverman Company purchased machinery for $162,000 on January 1, 2020. It is estimated that the…
A: Depreciation: Depreciation is a method of reducing the capitalized cost of long-lived operating…
Q: On January 5, 2021, Lighter Company acquired a building. The building had an estimated useful life…
A: Sum of years' digits of useful life = 1+2+3+4+5+6+7+8+9+10 = 55 years Depreciation fraction of 2021…
Q: King Company purchased a machine on July 1, 2021, for P600,000. The machine has an estimated useful…
A: If the value of an asset gets reduced due to the normal usage in the the operation of the business,…
Q: Watts Company purchased equipment in 2013 for $90,0ó0 and estimated a $6,000 salvage value at the…
A: Annual Depreciation as per straight line method is computed by the following formula: Depreciation…
Q: Sheridan Company purchased equipment for $ 120000 on January 1, 2020, and will use the…
A:
Q: PIKACHU purchased an equipment for P540,000 on January 1, 2020. The equipment has an estimated…
A: Sum of year digit method is a depreciation method where the depreciation for the year is calculated…
Q: Vaughn Company purchased a machine on January 1, 2019, for $59000 with an estimated salvage value of…
A: Depreciation is charged on the assets indicating the decrease in the value of the asset.…
Q: Sta Elena Construction & Development Corporation purchased a construction crane on January 1, 2019…
A: Introduction: If carrying value of an asset is more than the recoverable amount then the asset is…
Q: On July 1, 2019, AXS COMPANY acquired an asset for P1,312,500. The asset is being depreciated over a…
A: solution: given: purchase price (cost ) =P1312500 useful life =6 years residual value…
Q: Concord Company acquires a delivery truck at a cost of $54,000 on January 1, 2022. The truck is…
A: Annual depreciation expense under straight line method = (Cost - Salvage value)/Useful life
Q: On July 1, 2020, New Orleans Corporation purchased equipment at a cost of P340,000. The equipment…
A: Depreciation rate = ( 100 / Useful life ) x 2
Q: Equipment was purchased at the beginning of 2019 for $820000. At the time of its purchase, the…
A: Annual Depreciation (straight line method) = (Cost of the assets - Residual value) / Expected life…
Q: Parnell Company acquired construction equipment on January 1, 2020, at a cost of $70,100. The…
A: Introduction: A journal entry is used to record a company that will focus on a company's accounting…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.Comprehensive: Acquisition, Subsequent Expenditures, and Depreciation On January 2, 2019, Lapar Corporation purchased a machine for 50,000. Lapar paid shipping expenses of 500, as well as installation costs of 1,200. The company estimated that the machine would have a useful life of 10 years and a residual value of 3,000. On January 1, 2020, Lapar made additions costing 3,600 to the machine in order to comply with pollution-control ordinances. These additions neither prolonged the life of the machine nor increased the residual value. Required: 1. If Lapar records depreciation expense under the straight-line method, how much is the depreciation expense for 2020? 2. Assume Lapar determines the machine has three significant components as shown below. If Lapar uses IFRS, what is the amount of depreciation expense that would be recorded?
- During 2019, Ryel Companys controller asked you to prepare correcting journal entries for the following three situations: 1. Machine A was purchased for 50,000 on January 1, 2014. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 25,000. The estimated residual value remains at 5,000, but the service life is now estimated to be 1 year longer than estimated originally. 2. Machine B was purchased for 40,000 on January 1, 2017. It had an estimated residual value of 5,000 and an estimated service life of 10 years. it has been depreciated under the double-declining-balance method for 2 years. Now, at the beginning of the third year, Ryel has decided to change to the straight-line method. 3. Machine C was purchased for 20,000 on January 1, 2018, Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value of the machine is 2,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry necessary for each situation to record depreciation expense for 2019.On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was estimated at 2,000. The equipment will be depreciated over 10 years using the double-declining balance method. Counting the year of acquisition as one-half year, Mundo should record 2019 depredation expense of: a. 7,680 b. 9,000 c. 9,600 d. 10,000At the beginning of 2020, Holden Companys controller asked you to prepare correcting entries for the following three situations: 1. Machine X was purchased for 100,000 on January 1, 2015. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 45,000. The estimated residual value remains at 10,000, but the service life is now estimated to be 1 year longer than originally estimated. 2. Machine Y was purchased for 40,000 on January 1, 2018. It had an estimated residual value of 4,000 and an estimated service life of 8 years. It has been depreciated under the sum-of-the-years-digits method for 2 years. Now, the company has decided to change to the straight-line method. 3. Machine Z was purchased for 80,000 on January 1, 2019. Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value is 8,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry for each situation to record the depreciation for 2020. Ignore income taxes.
- Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used for deliveries, has the following characteristics: Estimated life: 5 years Estimated residual value: 3,000 Depreciation method for financial statements: straight-line method Depreciation for income tax purposes: MACRS (3-year life) From 2019 through 2023, each year, Hunter had sales of 100,000, cost of goods sold of 60,000, and operating expenses (excluding depreciation) of 15,000. The truck was disposed of on December 31, 2023, for 2,000. Required: 1. Prepare an income statement for financial reporting through pretax accounting income for each of the 5 years, 2019 through 2023. 2. Prepare, instead, an income statement for income tax purposes through taxable income for each of the 5 years, 2019 through 2023. 3. Compare the total income for all 5 years under Requirements 1 and 2.Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual value was 500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: 1. Compute depredation expense (rounded to the nearest dollar) for 2019 and 2020 using the: a. straight-line method b. sum-of-the-years-digits method c. double-declining-balance method 2. Next Level Which method produces the highest book value at the end of 2020? 3. Next Level Which method produces the highest charge to income in 2020? 4. Next Level Over the life of the asset, which method produces the greatest amount of depreciation expense?
- On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.Dinnell Company owns the following assets: In the year of acquisition and retirement of an asset, Dinnell records depreciation expense for one-half year. During 2020, Asset A was sold for 7,000. Required: Prepare the journal entries to record depreciation on each asset for 2017 through 2020 and the sale of Asset A. Round all answers to the nearest dollar.Depreciation Methods Sorter Company purchased equipment for 200,000 on January 2, 2019. The equipment has an estimated service life of 8 years and an estimated residual value of 20,000. Required: Compute the depreciation expense for 2019 under each of the following methods: 1. straight-line 2. sum-of-the-years-digits 3. double-declining-balance 4. Next Level What effect does the depreciation of the equipment have on the analysis of rate of return?