On January 1, 2022, Roxanne Company purchased equipment with cost of P10,000,000, useful life of 10 years and no residual value. The entity used straight line depreciation. On December 31, 2022 and December 31, 2023, the entity determined that impairment indicators are present. There is no change in useful life or residual value. The following information is available for impairment testing at each year-end: December 31, 2022 December 31, 2023 Fair value less cost of disposal 8,100,000 8,400,000 Value in use 8,550,000 8,200,000 1. What is the impairment loss for 2022? A. 900,000 C. 600,000 B. 450,000 D. Zero 2. What is the gain on reversal of impairment for 2023? A. 400,000 B. 800,000 C. 600,000 D. Zero 3. What is the depreciation for 2024? A. 1,000,000 B. 1,050,000 C. 1,025,000 D. 950,000

On January 1, 2022, Roxanne Company purchased equipment with cost of P10,000,000, useful life of 10 years and no residual value. The entity used straight line depreciation. On December 31, 2022 and December 31, 2023, the entity determined that impairment indicators are present. There is no change in useful life or residual value. The following information is available for impairment testing at each year-end: December 31, 2022 December 31, 2023 Fair value less cost of disposal 8,100,000 8,400,000 Value in use 8,550,000 8,200,000 1. What is the impairment loss for 2022? A. 900,000 C. 600,000 B. 450,000 D. Zero 2. What is the gain on reversal of impairment for 2023? A. 400,000 B. 800,000 C. 600,000 D. Zero 3. What is the depreciation for 2024? A. 1,000,000 B. 1,050,000 C. 1,025,000 D. 950,000

Name: On January 1, 2022, Roxanne Company purchased equipment with cost of
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Description: On January 1, 2022, Roxanne Company purchased equipment with cost of P10,000,000, useful life of 10 years and noresidual value. The entity used straight line depreciation. On December 31, 2022 and December 31, 2023, the entitydetermined that impairm

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

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...

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Albany Corporation purchased equipment at the beginning of Year 1 for 75,000. The asset does not have a residual value and is estimated to be in service for 8 years. Calculate the depreciation expense for Years 1 and 2 using the double-declining-balance method. Round to the nearest dollar.
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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