On January 2, 2022, Bergify Co. entered into a 5-year lease contract for drilling equipment. Bergify recorded the lease liability for P2,400,000, which includes a present value of P100,000 for the purchase option. Bergify estimates that the fair value of the equipment at the end of its 8-year economic life will be P200,000. Bergify uses double-declining method of depreciating its assets. What amount should Bergify recognize as depreciation expense on the leased asset for 2022?
On January 2, 2022, Bergify Co. entered into a 5-year lease contract for drilling equipment. Bergify recorded the lease liability for P2,400,000, which includes a present value of P100,000 for the purchase option. Bergify estimates that the fair value of the equipment at the end of its 8-year economic life will be P200,000. Bergify uses double-declining method of depreciating its assets. What amount should Bergify recognize as depreciation expense on the leased asset for 2022?
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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On January 2, 2022, Bergify Co. entered into a 5-year lease contract for drilling equipment. Bergify recorded the lease liability for P2,400,000, which includes a present value of P100,000 for the purchase option. Bergify estimates that the fair value of the equipment at the end of its 8-year economic life will be P200,000. Bergify uses double-declining method of
What amount should Bergify recognize as depreciation expense on the leased asset for 2022?
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