On January 1, 2012, Pacific Airlines sold an airplane with an estimated useful life of 10 years. At the same time, Pacific Airlines leased the back the plane for 10 years. The sales price of the airplane was P5, 000,000, the carrying amount P4, 010,000, and the annual rental of P739, 750. Pacific Airlines intends to depreciate the asset using the sum-of-the years-digits depreciation method. Discuss on how the gain on the sale should be reported at the end of 2019 in the financial statements.

Q: Archer Company purchased equipment in January of 2011 for P90,000. The equipment was being…

A: Depreciation Expense (Straight Line Method) = Cost - Salvage ValueUseful Life of an Asset

Q: The estimated useful life of the machine is five years, after which time the residual value is…

A: The right answer is option c.36,000

Q: A piece of equipment was purchased by Jonesy’s Ltd. on April 10, 2016 at a cost of $35,000. It is…

A: Depreciation is a reduction in the value of assets due to the usage of that asset. We can evaluate…

Q: JME acquired a depreciable asset on January 1, 2014, for $60,000 cash. At that time JME estimated…

A: Calculate the depreciation expense for first two years.

Q: On July 1, 2020, Zelensky Company, a calendar-year company, purchased a machine for a cash price of…

A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…

Q: At the beginning of the year Joeker Company brought machinery under a contract that required a down…

A: Interest is paid on the loan amount sanctioned. Interest amount is said to be the cost of the funds…

Q: Coppola Company purchased a machine on January 1, 2016, for $20,000 cash. In addition, Coppola paid…

A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…

Q: On January 1, 2017, Jungkook Company purchased an equipment for P1,970,000. On this date, the…

A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…

Q: Mazaya Company purchased a piece of equipment on January 1, 2010. The equipment cost $80,000 and had…

A: Double declining depreciation rate = Straight line depreciation rate x 2 = (100/8 years) x 2 = 25%

Q: On Jan. 1, 2014, a company placed into service a machine that had an acquisition cost of $60,000, a…

A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…

Q: At the beginning of 2009, Glass Manufacturing purchased a new machine for its assembly line at a…

A: Formula:

Q: On January 1, 2011, RIGHTEOUS MORAL Co. acquired a piece of equipment for ₱2,000,000. The equipment…

A: Discount rate = 10% Revised useful life = 4 years Annual cash flows from revenues = P200,000 Present…

Q: Awni Company purchased a new machine on May 1, 2010 for €44,000. At the time of acquisition, the…

A: Monthly Depreciation (straight line method) = (Cost of the assets - Residual value) / Expected life…

Q: On January 1, 2017, Global Manufacturing purchased a machine for $540,000 that it expected to have a…

A: disposal of assets:- It  involves eliminating assets from accounting records. Loss on sale. Debit…

Q: CEE Corporation purchased a machine on January 1, 2016 by instalment, initially paying $1,000,000,…

A: Depreciation - It refers to the fall in the value of fixed assets due to wear and tear. It is a…

Q: Shanahan Construction purchased a crane on January 1, 2015, for $102,750. At the time of purchase,…

A: Annual depreciation = (cost of the assets- residual value) /estimated life of the assets =…

Q: Windsor Corporation purchased a new machine for its assembly process on August 1, 2020. The cost of…

A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…

Q: CEE Corporation purchased a machine on January 1, 2016 by instalment, initially paying ₱1,000,000,…

A: In case of purchase of fixed asset under instalment method, then amount paid by way of number of…

Q: Dewey Corporation purchased a machine for $340,000 on January 1, 2012. The machine had an…

A: Depreciation is considered as an expense charge on the value of the Asset. The most common method…

Q: On January 1, 2010, Graham Company purchased a new machine for P2,100,000. The new machine has an…

A: SOLUTION   FORMULA =  ACCUMULATED DEPRECIATION  (SUM OF THE YEARS DIGIT METHOD) =(COST OF ASSET -…

Q: On July 1, 2020, Lettuce Company, a calendar-year company, purchased a machine for a cash price of…

A: 2020: Depreciation rate = 1/useful life = 1/10 = 10% Depreciation expense (for the entire year) = 2…

Q: Quer Company purchased two machines for P250,000 each on January 2, 2020. The machines were put into…

A: Expense:- Expense is the use of an asset or service to generate revenue. Expense is the reduction in…

Q: Liquior Company has an equipment costing P700,000 with an estimated residual value of P70,000 and an…

A: Depreciation: Depreciation means the reduction in the value of an asset over the useful life of the…

Q: At the beginning of 2009, Glass Manufacturing purchased a new machine for its assembly line at a…

A: The formula to compute depreciation under straight line method as follows:

Q: On April 1, 2014, Brandy Company has a machine with a cost of P1,000,000 and accumulated…

A: In order to determine the carrying value of the assets, the accumulated depreciation is required to…

Q: For the year 2020, how much should be recognized as depreciation expense?

A: Depreciation Expenses:- These are those expenses that appear in the income statement of the company,…

Q: quired a patent from Generics Research Corporation for $3 million. The legal life of the patent is…

A: Amortization costs are the costs of long-term assets (such as computers and automobiles) over the…

Q: Marigold Company constructed a building at a cost of $2,288,000 and occupied it beginning in January…

A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…

Q: On January 2, 2018, Lem Corp. bought machinery under a contract that required a down payment of…

A: Depreciation is the method of accounting which is used for allocating the cost of physical or…

Q: CEE Corporation purchased a machine on January 1, 2016 by instalment, initially paying $1.000.000,…

A: The cost of the machine would be the price that would be paid on a cash basis immediately upon…

Q: Waterway Industries purchased machinery on January 2, 2015, for $860000. The straight-line method is…

A: Determine the book value at the end of 2020.

Q: On January 1, 2018, KingKong Corp. purchased an equipment with an estimated useful life of 8 years.…

A: Salvage Value P2,000 Useful Life (in years) 8 Sum of the year (1+2+3+4+5+6+7+8) 36…

Q: The Apex Company purchased a tooling machine for $30,000. The machine was being depreciated on the…

A: Under the straight line method, depreciation expense each year = (cost - salvage value) / useful…

Q: Speed, Inc., is a shipping company. On 1/1/20, the company purchases a new commercial sleeper truck…

A: Depreciation = 790,000 -60000/10  = 73000 SLM rate = 1/10 = 10% Income StatementDepreciation…

Q: ramble Corp. purchased a depreciable asset for $698000 on April 1, 2018. The estimated salvage value…

A: Price = $ 698,000 Salvage Value = $ 68,000 Estimated useful life of years = 5 years

Q: On January 2, 2023, Saminski, Inc., acquired equipment for $700,000. The estimated life of the…

A: Depreciation is an expense account that is considered as a reduction in the value of an asset due to…

Q: Martinez Company constructed a building at a cost of $2,464,000 and occupied it beginning in January…

A: Depreciation is the loss in the value of the asset caused due to its usage, wear and tear.There are…

Q: Anne Company has an equipment costing P700,000 with an estimated residual value of P70,000 and an…

A: The Accumulated depreciation is calculated as sum of Depreciation expense for past years. The book…

Q: Ayayai Corporation purchased machinery on January 1, 2022, at a cost of $252,000. The estimated…

A: Under straight line method, same amount of depreciation is charged every year. Annual depreciation =…

Q: On January 1, 2015, Jersey Corporation purchased for $800,000, equipment having a useful life of ten…

A: Assets are the resources of the business which it has acquired for business purpose. Assets can be…

Q: Standard Company purchased a machine on January 1, 2009 for P500,000. At the time, it was determined…

A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…

Q: The Giovanni Company purchased a tooling machine in 2007 for $120,000. The machine was being…

A: Solution: Initial annual depreciation using SLM = $120,000 / 20 = $6,000 Carrying value of machine…

Q: DEF manufacturing company, a calendar-year company, purchased a machine for P650,000 on January…

A: Cost of machine = Purchase price + Freight in + Installation cost + Testing cost = P650,000 + 5,000…

Q: Concord Corporation, which has a calendar year accounting period, purchased a new machine for $95400…

A:

Q: Bonita Industries purchased a new machine on May 1, 2012 for $561600. At the time of acquisition,…

A: Calculate the loss recognized from the sale of machine:

Q: The M&M Company purchased a new punchpress in 2005 at a cost of $265,000. M&M alsopaid…

A: The formula of cost basis=Cost of assets+Shipping and delivery cost+Insatallation charges+Other cost

Q: Orton Corporation, which has a calendar year accounting period, purchased a new machine for $80,000…

A: Calculate depreciation expense: Depreciation expense = (Purchase cost - salvage value) / useful life…

Q: On December 31,2015, DAVE Corporation purchased an equipment with an estimated useful life of 10…

A: Depreciation means the amount fixed assets written off due to normal wear and tear , normal usage ,…

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.