Instructions If generally accepted accounting principles were followed, how would the items above relating to research and development activities be reported on the following financial statements? a. The company's income statement for 2025. b. The company's balance sheet as of December 31, 2025.
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- Assume that additional information has been provided relating to the cost ($984,000). There are three components of the plant asset. Components 1, 2, and 3 have costs of $405,000, $260,000, and $319,000, respectively. The useful lives of components 1, 2, and 3 are 25, 20, and 30 years, respectively. Determine straight-line depreciation expense for 2020 and 2021 for each component under IFRS if the residual value is $140,000 for component 1, $168,000 for component 2, and $76,000 for component 3. (Do not round intermediate calculations and round answers to 0 decimal places, e.g. 5,275.) Depreciation expense 2020 2021 Component 1 10600 Component 2 4600 Component 3 8100At the beginning of 2022, Robotics Incorporated acquired a manufacturing facility for $13.5 million. $10.5 million of the purchase price was allocated to the building. Depreciation for 2022 and 2023 was calculated using the straight-line method, a 25-year useful life, and a $2.5 million residual value. Assume that 2022 depreciation was incorrectly recorded as $32,000. This error was discovered in 2024. Required: 1. Record the journal entry needed in 2024 to correct the error. 2. What is depreciation on the building for 2024, assuming no change in estimate of useful life or residual value? Complete this question by entering your answers in the tabs below. General Journal Depreciation Record the journal entry needed in 2024 to correct the error. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answe whole dollars, and not in millions. View transaction list Journal entry worksheet < 1Vaughn Company purchased a new machine on September 1, 2022, at a cost of $134,000. The company estimated that the machine will have a salvage value of $13,000. The machine is expected to be used for 10,000 working hours during its 5-year life. (a) Compute the depreciation expense under the Straight-line method for 2022, 2023, and 2024. (Round answers to O decimal places, eg. 15250) Depreciation expense for: 2022 $ (b) Your answer is correct. 2023 (c) $ 2024 $ eTextbook and Media List of Accounts Your answer is correct. eTextbook and Media Compute the depreciation expense under the Units-of-activity for 2022, assuming machine usage was 830 hours. List of Accounts Depreciation expense for 2022 $ 8067 Depreciation expense for: 2022 $ 24200 2023 $ 24200 2024 $ Attempts: 1 of 3 used 10043 Compute the depreciation expense under the Declining-balance using double the straight-line rate for 2022, 2023, and 2024. (Round answers to 0 decimal places, eg. 15250) Attempts: 1 of 3 used
- E11-18 Depletion Feller Company purchased a site for a limestone quarry for $100,000 on January 2, 2019. It estimate that the quarry will yield 400,000 tons of limestone. It estimates that its retirement obligation has a fair value of $20,000, after which the land could be sold for $10,000. In 2019, 80,000 tons were quarried and 60,000 tons sold. Costs of production (excluding depletion) are $4 per ton. Required: 1. Compute the depletion cost per ton. 2. Compute the total cost of the inventory at December 31, 2019. 3. Compute the total cost of goods sold for 2019.During 2018, Wright Tool Company purchased a building site for its proposed research and development laboratory at a cost of $60,000. Construction of the building was started in 2018. The building was completed on December 31, 2019, at a cost of $320,000 and was placed in service on January 2, 2020. The estimated useful life of the building for depreciation purposes was 20 years. The straight-line method of depreciation was to be employed, and there was no estimated residual value. Management estimates that about 50% of the projects of the research and development group will result in long-term benefits (i.e., at least 10 years) to the corporation. The remaining projects either benefit the current period or are abandoned before completion. A summary of the number of projects and the direct costs incurred in conjunction with the research and development activities for 2020 appears below. Number of Projects Salaries and Employee Benefits Other Expenses (excluding Building…During 2018, Sandhill Company purchased a building site for its proposed research and development laboratory at a cost of $51,000. Construction of the building was started in 2018. The building was completed on December 31, 2019, at a cost of $300,000 and was placed in service on January 2, 2020. The estimated useful life of the building for depreciation purposes was 20 years. The straight-line method of depreciation was to be employed, and there was no estimated residual value.Management estimates that about 50% of the projects of the research and development group will result in long-term benefits (i.e., at least 10 years) to the corporation. The remaining projects either benefit the current period or are abandoned before completion. A summary of the number of projects and the direct costs incurred in conjunction with the research and development activities for 2020 appears below. Numberof Projects Salaries and EmployeeBenefits Other Expenses(excluding Building…
- Ariel Company purchased a boring machine on January 1, 2022 for P8,100,000. The useful life of the machine is estimated at three years with a residual value of P600,000. During the useful life, the expected units of production from the machine are 10,000 units for 2022, 9,000 units for 2023 and 6,000 units for 2024. What is the depreciation expense for 2023 using the most appropriate depreciation method? A. 2,700,000 B. 3,000,000 C. 2,500,000 D. 2,916,000During 2018, Sandhill Company purchased a building site for its proposed research and development laboratory at a cost of $51,000. Construction of the building was started in 2018. The building was completed on December 31, 2019, at a cost of $300,000 and was placed in service on January 2, 2020. The estimated useful life of the building for depreciation purposes was 20 years. The straight-line method of depreciation was to be employed, and there was no estimated residual value.Management estimates that about 50% of the projects of the research and development group will result in long-term benefits (i.e., at least 10 years) to the corporation. The remaining projects either benefit the current period or are abandoned before completion. A summary of the number of projects and the direct costs incurred in conjunction with the research and development activities for 2020 appears below. Numberof Projects Salaries and EmployeeBenefits Other Expenses(excluding Building…Grumpy Inc purchased a machine on January 1, 2021, at a cost of $120,000. The machine was originally estimated to have a salvage value of $15,000 and an estimated life of 3 years. The machine is expected to produce a total of 100,000 components during its life, distributed as follows, 40,000 in 2021, 35,000 in 2022, and 25,000 in 2023. Required: a) Calculate the amount of depreciation to be charged in each of the three years, using each of the following methods. i) Straight-line method ii) Units of activity iii) Declining balance at a rate of 200% b) Which method results in the highest depreciation expense: i) During the first two years? i) Over all three years? Part 2 - 7 Marks Sleepy Ltd negotiated a purchase of land, building and equipment from Bambi Corp. The purchase was completed on June 28, 2021 at a total cash cost of $800,000. The estimated market value of each asset at the time was: land, $330,000; building, $520,000; and machinery, $150,000. Required: 1. Prepare journal…
- The Harry Corporation purchased a machine on January 1, 2020. The machine cost 46,000, with an estimated salvage value of P 2,000 and an estimated useful life of 10 years. As a result of technological improvements, a revision of the machine's useful life and estimated salvage value was made. On January 1, 2021, the equipment was estimated to last through 2022, with an estimated value at the end of 2022 of P 500. Harry uses the straight-line depreciation method. What is the revised depreciation in year 2021?3. On July 1, 2023 Jackson Company purchased factory equipment for $880,000 with an estimated $40,000 salvage value. The estimated useful life for the equipment is 12 years. During 2023, 2024, and 2025 the equipment is depreciated using the straight-line method. During 2026, $36,000 in maintenance is required on the machine to keep it running up to its standard operating specifications. Also, in 2026, $115,000 is spent to improve the equipment's efficiency and prolong its useful life. The new useful life is expected to be an additional 12 years beginning in 2026 and the revised salvage value is $25,000. Instructions 1. What journal entry is required to record partial year depreciation for 2023? 2. What journal entry is required to record annual depreciation for 2025? W(S) ned 3. Explain the accounting treatment of the $36,000 in maintenance that occurred in 2026. 4. Explain the accounting treatment of the $115,000 in equipment improvement that occurred in 2026. 5. What journal entry is…On January 1, 2024, the Allegheny Corporation purchased equipment for $150,000. The estimated service life of the equipment is 10 years and the estimated residual value is $7,000. The equipment is expected to produce 360,000 units during its life. Required: Calculate depreciation for 2024 and 2025 using each of the following methods. 3. Units of production (units produced in 2024, 40,000; units produced in 2025, 35,000). Note: Round "Depreciation per unit rate" answers to 2 decimal places.