Create Co. purchased equipment on November 1, 2021 for P850,000. The company estimates that the equipment will have a scrap value of P50,000 at the end of its useful life of 4 years. The company uses the straight-line method in depreciating its assets. The carrying amount of the equipment on December 31, 2023 is Select the correct response: O 450,000 O 850,000 O 600,000 400,000

Create Co. purchased equipment on November 1, 2021 for P850,000. The company estimates that the equipment will have a scrap value of P50,000 at the end of its useful life of 4 years. The company uses the straight-line method in depreciating its assets. The carrying amount of the equipment on December 31, 2023 is Select the correct response: O 450,000 O 850,000 O 600,000 400,000

Name: Create Co. purchased equipment on November 1, 2021 for P850,000. The
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Description: Create Co. purchased equipment on November 1, 2021 for P850,000. The company estimates that the equipment will have a scrap value of P50,000 at the end of its useful life of 4 years. The company uses thestraight-line method in depreciating its asset

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 9MCQ: Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a...

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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
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.
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.
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