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- The following balances at 1/01/17 are taken from the books of Diamond Ltd whose financial statements are prepared to 31 December each year. P Land @ cost 1,000,000 Buildings @ cost 500,000 Buildings (Accumulated depreciation) 210,000 Plant & equipment @ cost 40,000 Plant & equipment (Accumulated depreciation) 24,000 The company's depreciation policies are as follows. Depreciation is not charged on Land. Building has depreciation provided at 2% per annum on cost on the straight line basis. Plant & equipment its depreciation is provided at 25% per annum on the reducing balance basis. A full year's deprecation is charged in the year of acquisition of all assets and none in the year of disposal. During the year to 31/12/17 the below transactions took place. 1/03/17…Please explain how to the methods below and only answer if you completely answer the question. Perdue Company purchased equipment on April 1 for $43,470. The equipment was expected to have a useful life of three years, or 7,020 operating hours, and a residual value of $1,350. The equipment was used for 1,300 hours during Year 1, 2,500 hours in Year 2, 2,100 hours in Year 3, and 1,120 hours in Year 4. Required: Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method.During the current year, Mine View Company incurred P2,000,000 in exploration cost for each of the 15 oil wells drilled in the current year In Surigao. Of the 15 wells drilled , 8 were dry holes. The entity used the successful effort method of accounting. None of the oil found is depleted in the current year. What oil exploration expense should be reported in the income statement for the current year .
- Can you please look at this problem and tell me how i am getting the question with the x wrong and give me the solution Perdue Company purchased equipment on April 1 for $77,760. The equipment was expected to have a useful life of three years, or 7,560 operating hours, and a residual value of $2,160. The equipment was used for 1,400 hours during Year 1, 2,600 hours in Year 2, 2,300 hours in Year 3, and 1,260 hours in Year 4. Required: Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) units-of-activity method, and (c) the double-declining-balance method. Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar. a. Straight-line method Year Amount Year 1 $fill in the blank 1 Year 2 $fill in the blank 2 Year 3 $fill in the blank 3 Year 4 $fill in the blank 4 b. Units-of-activity method…On June 1, Aggie Company purchased equipment for $ 50,000. The equipment has a 7yr life with a residual value of $5,000. Aggie uses units-of-production method depreciation and the equipment is expected to yield 9,000 operating hours. (a) Calculate the depreciation expense per hour of operation. (b) The bulldozer is operated 1,000 hours in the first year, 200 hours in the second year, and 1,400 hours in the third year of operations. Journalize the depreciation expense for each year. Date Account Title Debit Credit Year 1 Year 1 Year 3Tristar Production Company began operations on September 1, 2021. Listed below are a number of transactions that occurred during its first four months of operations. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $160,000 in cash for the property. According to appraisals, the land had a fair value of $117,000 and the building had a fair value of $63,000. On September 1, Tristar signed a $46,000 noninterest-bearing note to purchase equipment. The $46,000 payment is due on September 1, 2022. Assume that 10% is a reasonable interest rate. On September 15, a truck was donated to the corporation. Similar trucks were selling for $3,100. On September 18, the company paid its lawyer $6,000 for organizing the corporation. On October 10, Tristar purchased maintenance equipment for cash. The purchase…
- During 20x7, the controller of the Sparrow Company asked you to prepare correcting journal entries for the following three situations: 1. Machine A was purchased for 400,000 on January 1, 20x5. It had an estimated residual value of 50,000 and an estimated service life of 10 years. It has been depreciated under the double-declining-balance metgod for 2 years. Now, at the beginning of the third year, Sparrow hass decided to change to the straight-line method. 2. Machine B was purchased for 500,000 on January, 20x2. Straight line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 250,000. The estimated residual value remains at 50,000 but the service life is now estimated to be 1 year longer than estimated originally. 3. Machine C was purchased for 200,000 on January 20x6. Double-declinig-balance depreciation has been recorded for 1 year. The estimated residual value of the machine is 20,000 and the estimated service life is 5 years. The…The GHI Company has the following Fixed Asset. The company prepares statements on a calendar year basis. March 1: Purchased equipment for $7,000 on October 1 of the calendar year. The salvage value is $1,000 and it has a life of 6 years. Determine the depreciation for the current year (which is a partial year) and the following year (which is a full 12 month year) under the following methods: Straight-Line Method Double-Declining Balance MethodOn July 1, Harding Construction purchases a bulldozer for $228,000. The equipment has a 8-year life with a residual value of $16,000. Harding uses straight-line depreciation. Required: (a) Calculate the depreciation expense and provide the journal entry for the first year ending December 31.* (b) Calculate the third year’s depreciation expense and provide the journal entry for the third year ending December 31.* (c) Calculate the last year’s depreciation expense and provide the journal entry for the last year.* *Refer to the Chart of Accounts for exact wording of account titles. CHART OF ACCOUNTS Harding Construction General Ledger ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 114 Interest Receivable 115 Notes Receivable 116 Merchandise Inventory 117 Supplies 119 Prepaid Insurance 120 Land 121 Equipment 122 Accumulated Depreciation 132 Goodwill 133 Patents LIABILITIES 210 Accounts Payable 211…
- On July 1, Harding Construction purchases a bulldozer for $228,000. The equipment has an 8-year life with a residual value of $16,000. Harding uses straight-line depreciation. (a) Calculate the depreciation expense and provide the journal entry for the first year ending December 31. (b) Calculate the third year’s depreciation expense and provide the journal entry for the third year ending December 31. (c) Calculate the last year’s depreciation expense and provide the journal entry for the last year.On January 1, Year 1, Andrei’s Design Inc., purchased equipment for $60,000. Residual value at the end of an estimated four-year service life is expected to be $10,000. The company expects the machine to operate for 20,000 hours. The machine operated for 3,600 and 4,000 hours in Year 1 and Year 2, respectively. The company uses the units-of-production method. For how much would each item below be reported at the end of Year 2? 1.deprecation expense: 2.Accumulated deprecation: 3. Book value:For each of the following situations write the principle, assumption, or concept that justifies or explains what occurred. A. A landscaper received a customers order and cash prepayment to install sod at a house that would not be ready for installation until March of next year. The owner should record the revenue from the customer order in March of next year, not in December of this year. B. A company divides its income statements into four quarters for the year. C. Land is purchased for $205,000 cash; the land is reported on the balance sheet of the purchaser at $205,000. D. Brandys Flower Shop is forecasting its balance sheet for the next five years. E. When preparing financials for a company, the owner makes sure that the expense transactions are kept separate from expenses of the other company that he owns. F. A company records the expenses incurred to generate the revenues reported.