Bold ltd purchased mactinery on 1 lanuary 2021 at a cast of R1200000 A major inspection has to be carned out on the machinery every three years. The last inspectian perkumed on the mactine was on 31 December 2000 by the selli and the inspection costs were included in the purchase price. On the acquisinich date, fhe present value of future expected inspection costs to be incurred was estimatiod at an amount of R240 000. Dn the wequation date the estimatod useful life of 10 years was alocated to the machime. The inspection component is part of the mactine and not a separate arset. The carrying amount of the machinery (including the inspection component) for the year ended 31 Decembe 2021 is: RI 124000 A1 000000 R1 056000 P1 024000n

Bold ltd purchased mactinery on 1 lanuary 2021 at a cast of R1200000 A major inspection has to be carned out on the machinery every three years. The last inspectian perkumed on the mactine was on 31 December 2000 by the selli and the inspection costs were included in the purchase price. On the acquisinich date, fhe present value of future expected inspection costs to be incurred was estimatiod at an amount of R240 000. Dn the wequation date the estimatod useful life of 10 years was alocated to the machime. The inspection component is part of the mactine and not a separate arset. The carrying amount of the machinery (including the inspection component) for the year ended 31 Decembe 2021 is: RI 124000 A1 000000 R1 056000 P1 024000n

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 11E: On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated...

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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. 10,000
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?
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Calico Inc. purchased a patent on a new drug. The patent cost $21,000. The patent has a life of twenty years, but Calico only expects to be able to sell the drug for fifteen years. Calculate the amortization expense and record the journal for the first-year expense.
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