On December 31, 2020, RJ Co. had delivery equipment in the total cost of P1,000,000.00 and accumulated depreciation of P500,000.00. This is being depreciated using the straight line method and with an estimated useful life of 10 years. On December 31, 2021, a six year old delivery equipment with an original cost of P200,000.00 was traded in for a brand new delivery equipment in the amount of P400,000.00. This new equipment is also depreciated using the straight line method and has a useful life of 10 years. How much is the depreciation expense on 2022?

On December 31, 2020, RJ Co. had delivery equipment in the total cost of P1,000,000.00 and accumulated depreciation of P500,000.00. This is being depreciated using the straight line method and with an estimated useful life of 10 years. On December 31, 2021, a six year old delivery equipment with an original cost of P200,000.00 was traded in for a brand new delivery equipment in the amount of P400,000.00. This new equipment is also depreciated using the straight line method and has a useful life of 10 years. How much is the depreciation expense on 2022?

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
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.
On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.
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