Anne Company has an equipment costing P700,000 with an estimated residual value of P70,000 and an estimated useful life of six years. After using and depreciating the asset for the past two years, the company upgraded the machine parts and the cost of upgrading amounted to P120,000. Assuming that the upgrading costs extended the asset’s economic useful life by an additional two years, what is the revised depreciation expense for the third year using the (1) straight-line method and (2) sum-of-the-years’ digits method? a. (1) P90,000 and (2) P140,000 b. (1) P90,000 and (2) P120,000 c. (1) P101,667 and (2) P140,000 d. (1) P101,667 and (2) P120,000
Anne Company has an equipment costing P700,000 with an estimated residual value of P70,000 and an estimated useful life of six years. After using and depreciating the asset for the past two years, the company upgraded the machine parts and the cost of upgrading amounted to P120,000. Assuming that the upgrading costs extended the asset’s economic useful life by an additional two years, what is the revised depreciation expense for the third year using the (1) straight-line method and (2) sum-of-the-years’ digits method? a. (1) P90,000 and (2) P140,000 b. (1) P90,000 and (2) P120,000 c. (1) P101,667 and (2) P140,000 d. (1) P101,667 and (2) P120,000
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
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...
Related questions
Question
Anne Company has an equipment costing P700,000 with an estimated residual value of P70,000 and an estimated useful life of six years. After using and depreciating the asset for the past two years, the company upgraded the machine parts and the cost of upgrading amounted to P120,000.
Assuming that the upgrading costs extended the asset’s economic useful life by an additional two years, what is the revised depreciation expense for the third year using the
(1) straight-line method and
(2) sum-of-the-years’ digits method?
Assuming that the upgrading costs extended the asset’s economic useful life by an additional two years, what is the revised depreciation expense for the third year using the
(1) straight-line method and
(2) sum-of-the-years’ digits method?
a. (1) P90,000 and (2) P140,000
b. (1) P90,000 and (2) P120,000
c. (1) P101,667 and (2) P140,000
d. (1) P101,667 and (2) P120,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT