On January 3, 2019, Soju Co. purchased machinery. The machinery has an estimated useful life of eight years and an estimated salvage value of P30,000. The depreciation applicable to this machinery was P65,000 for 2021, computed by the sum-of-the-years'-digits method. The acquisition cost of the machinery was * a O P360,000 O P420,000 O P468,000 P390,000
Q: Equipment was purchased at the beginning of 2019 for P204,000. At the time of its purchase, the…
A: Solution: Original annual depreciation = (Cost - Residual value) / useful life = (P204,000 -…
Q: FDN Company acquires a building on April 1, 2021 at a cost of P26,500,000. The building has an…
A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…
Q: Goliath Company purchased an equipment on January 2, 2017 for P3,000,000. At the date of…
A: Depreciation expense is an expense which is charged on fixed assets over the years the assets is…
Q: Create Co. purchased equipment on November 1, 2021 for P850,000. The company estimates that the…
A: Annual Depreciation (straight line method) = (Cost of the assets - Residual value) / Expected life…
Q: On June 30, 2021, Maroon sold for P230,000 a machine acquired in 2018 for P420,000. The accumulated…
A:
Q: The Fisher Company purchased a machine on October 1, 2018, for $18,000. At the time of acquisition,…
A: Depreciable cost=Cost-Salvage value=$18,000-$5,000=$13,000
Q: On January 2, 2020, VSG purchased a transportation equipment costing P2,400,000. The new asset has…
A: Accumulated depreciation, December 31, 2022 = P2,400,000 x 2/8 = P600,000 Carrying value, December…
Q: On August 31, 2019, CROCUS Company purchased a new machinery for ₱540,000. The machinery has an…
A: Hi student Since there are multiple questions, we will answer only first question.
Q: On January 1, 2024, Sanderson Company acquired a machine for $1,000,000. The estimated useful life…
A: Depreciation: Decreasing value of Assets over its useful life period.
Q: On January 1, 2017, RIP Isabel Granada Company purchased a machinery for P600,000, with an estimated…
A: 1. Impairment loss is carrying amount below the recoverable amount. depreciation calculated based…
Q: On January 2, 2015, ABC Company acquired equipment to be used in its manufacturing operations. The…
A: Under the SYD method, the depreciation rate percentage for each year is calculated as the number of…
Q: Bataan Company purchased a machinery that was installed and ready for use on January 1, 2019 at a…
A: Depreciation rate under double declining rate = = 2 / useful life x 100% Given…
Q: On January 1, 2018, Sanderson, Inc. acquired a machine for $1,200,000. The estimated useful life of…
A: Investment in machine = $1,200,000 Life of equipment = 5 years Salvage value = $72,000 Number of…
Q: Coronado Industries purchased a machine on July 1, 2020, for $960000. The machine has an estimated…
A: Depreciation means decline in the estimation of benefit inside its valuable life because of mileage…
Q: On January 1, 20x1, DOC WILLIE Company acquired equipment from Catanduanes Factory Supplies with an…
A: Note: As per the norms of Bartleby, in case of many independent questions, 1 question can be…
Q: Bataan Company purchased a machinery that was installed and ready for use on January 1, 2019 at a…
A: Depreciation expense is the cost portion which is allocated to the fixed assets of the company and…
Q: On January 3, 2019, Soju Co. purchased machinery. The machinery has an estimated useful life of…
A: Sum of Years Digit = [n (n+1)/2] here n = total life of assets = 8 years Therefore Sum of Years…
Q: On January 3, 2019, Soju Co. purchased machinery. The machinery has an estimated useful life of…
A: Sum of the years digits = n(n+1)/2 Sum of the years digits = 8(8+1)/2 Sum of the years digits =…
Q: n January 1, 2019, ABC Company acquired a machine for 4,500,000. The machine has a useful life of 10…
A: A corporation can use the revaluation model to carry a fixed asset at its revalued value. Following…
Q: On December 31, 2020, RJ Co. had delivery equipment in the total cost of P1,000,000.00 and…
A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…
Q: King Company purchased a machine on July 1, 2018 for P600,000. The machine has an estimated useful…
A: Depreciation means the fall in value of assets because of wear and tear , usage , passage of time or…
Q: On Mar. 31, 2020 XYZ bought machinery at P300,000. XYZ opted to use the double-declining method to…
A: Machinery purchased on 31 March, 2020 = P 300000 Salvage Value = P 5000 Total depreciable amount for…
Q: SYD method, how much is the depreciation expense
A: Estimated useful life = 5 years Sum of years' digits = 5 + 4 + 3 + 2 + 1 = 15
Q: On January 1, 2015, Minco Coportation purchased, for $100,000, equipment having a useful life of the…
A: Depreciation = Total Cost of Equipment - Salvage ValueUseful life
Q: Murgatroyd Co. purchased equipment on January 1, 2019, for $900,000, estimating a five-year useful…
A: Double declining depreciation rate = Straight line depreciation rate x 2 = (100/5 years) x 2 = 40%
Q: ABC Co. purchased machinery that was installed and ready for use on January 3, 2020, at a total cost…
A: Solution: Depreciation rate - SLM = 1/5 = 20% Depreciation rate- DDB = 20%*2 = 40% Cost of machine =…
Q: On January 1, 2019, Tarlac Company acquired a machine for P4,500,000. The machine has a useful life…
A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…
Q: On January 1, 2019, Chiz Company acquired equipment to be used in its manufacturing operations. The…
A: Depreciation is considered as an expense charge on the value of the Asset. It can be calculated by…
Q: On January 1, 2021, Ding Company acquired an equipment with useful life of 8 years and P390,000…
A: The depreciation is a decline in the value of tangible assets over their useful life. it is a…
Q: On January 1, 2019, Pharoah Corporation acquired equipment at a cost of $768000. Pharoah adopted the…
A: First we need to calculate carrying amount of equipment at the beginning of 2021 after deduction of…
Q: On September 19, 2020, Sunland Company purchased machinery for $478000. Salvage value was estimated…
A: Solution: Under sum of years' digits method of depreciation. Depreciation is based on sum of digits…
Q: On January 1, 2021, Truesdale, Incorporated, purchased a piece of machinery for use in operations.…
A: Depreciation rate as per double declining balance method = (100/useful life) ×2
Q: On January 1, 2019, Ciara Corporation acquired an equipment to be used in its manufacturing…
A: Given information, Useful life =10 years Residual value =P50,000 Depreciation for the year 2021…
Q: On January 5, 2021, Lighter Company acquired a building. The building had an estimated useful life…
A: Sum of years' digits of useful life = 1+2+3+4+5+6+7+8+9+10 = 55 years Depreciation fraction of 2021…
Q: BLACK JACK Company purchased an automotive equipment on June 30, 2018 for P3,000,000. At the date of…
A: Depreciation is charged on the value of fixed assets due to normal usage , wear and tear and change…
Q: Goliath Company purchased an equipment on January 2, 2017 for P3,000,000. At the date of…
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
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: UMET Co. purchased equipment on January 1, 2020, at a cost of $600,000. The equipment is expected to…
A: The sum-of-the-years digits method is a quick way to figure out how much an asset would depreciate…
Q: Ventura Corporation purchased machinery on January 1, 2019 for P630,000. The company used the…
A: Net book value at the end of 2020 = Cost of the assets - accumulated depreciation under sum of digit…
Q: At the beginning of 2019, Robotics Inc. acquired a manufacturing facility for $13.9 million. $10.9…
A: Given that, Cost of the building = $109,00,000 Residual value = $2900000 Useful life of asset = 25…
Q: Sheridan Company purchased equipment for $ 120000 on January 1, 2020, and will use the…
A:
Q: ABC, Inc. purchased a crane on January 1, 2018, for P205,500. At the time of purchase, the crane was…
A: Under straight line method of recording depreciation, equal amount of depreciation expense is…
Q: PIKACHU purchased an equipment for P540,000 on January 1, 2020. The equipment has an estimated…
A: Sum of year digit method is a depreciation method where the depreciation for the year is calculated…
Q: On January 1, 2020, Miller Company purchased a machine for P2,750,000. The machine was depreciated…
A: Working: Total sum of 10 years = 1 + 2 + 3 + 4 + 5 + 6 + 7 + 8 + 9 + 10 = 55 years Sum of Remaining…
Q: Spiral Company uses the sun-of-the years’ digits method to depreciate equipment purchased in January…
A: Solution: Depreciation is a reduction in the value of an asset over time, due to normal wear and…
Q: On July 1, 2019, AXS COMPANY acquired an asset for P1,312,500. The asset is being depreciated over a…
A: solution: given: purchase price (cost ) =P1312500 useful life =6 years residual value…
Q: On July 1, 2020, New Orleans Corporation purchased equipment at a cost of P340,000. The equipment…
A: Double declining depreciation rate = Straight line depreciation rate x 2 = (100/8 years) x 2 = 25%
Question 14
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- 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.Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.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
- Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used for deliveries, has the following characteristics: Estimated life: 5 years Estimated residual value: 3,000 Depreciation method for financial statements: straight-line method Depreciation for income tax purposes: MACRS (3-year life) From 2019 through 2023, each year, Hunter had sales of 100,000, cost of goods sold of 60,000, and operating expenses (excluding depreciation) of 15,000. The truck was disposed of on December 31, 2023, for 2,000. Required: 1. Prepare an income statement for financial reporting through pretax accounting income for each of the 5 years, 2019 through 2023. 2. Prepare, instead, an income statement for income tax purposes through taxable income for each of the 5 years, 2019 through 2023. 3. Compare the total income for all 5 years under Requirements 1 and 2.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.
- Comprehensive: Acquisition, Subsequent Expenditures, and Depreciation On January 2, 2019, Lapar Corporation purchased a machine for 50,000. Lapar paid shipping expenses of 500, as well as installation costs of 1,200. The company estimated that the machine would have a useful life of 10 years and a residual value of 3,000. On January 1, 2020, Lapar made additions costing 3,600 to the machine in order to comply with pollution-control ordinances. These additions neither prolonged the life of the machine nor increased the residual value. Required: 1. If Lapar records depreciation expense under the straight-line method, how much is the depreciation expense for 2020? 2. Assume Lapar determines the machine has three significant components as shown below. If Lapar uses IFRS, what is the amount of depreciation expense that would be recorded?Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual value was 500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: 1. Compute depredation expense (rounded to the nearest dollar) for 2019 and 2020 using the: a. straight-line method b. sum-of-the-years-digits method c. double-declining-balance method 2. Next Level Which method produces the highest book value at the end of 2020? 3. Next Level Which method produces the highest charge to income in 2020? 4. Next Level Over the life of the asset, which method produces the greatest amount of depreciation expense?Gray Companys financial statements showed income before income taxes of 4,030,000 for the year ended December 31, 2020, and 3,330,000 for the year ended December 31, 2019. Additional information is as follows: Capital expenditures were 2,800,000 in 2020 and 4,000,000 in 2019. Included in the 2020 capital expenditures is equipment purchased for 1,000,000 on January 1, 2020, with no salvage value. Gray used straight-line depreciation based on a 10-year estimated life in its financial statements. As a result of additional information now available, it is estimated that this equipment should have only an 8-year life. Gray made an error in its financial statements that should be regarded as material. A payment of 180,000 was made in January 2020 and charged to expense in 2020 for insurance premiums applicable to policies commencing and expiring in 2019. No liability had been recorded for this item at December 31, 2019. The allowance for doubtful accounts reflected in Grays financial statements was 7,000 at December 31, 2020, and 97,000 at December 31, 2019. During 2020, 90,000 of uncollectible receivables were written off against the allowance for doubtful accounts. In 2019, the provision for doubtful accounts was based on a percentage of net sales. The 2020 provision has not yet been recorded. Net sales were 58,500,000 for the year ended December 31, 2020, and 49,230,000 for the year ended December 31, 2019. Based on the latest available facts, the 2020 provision for doubtful accounts is estimated to be 0.2% of net sales. A review of the estimated warranty liability at December 31, 2020, which is included in other liabilities in Grays financial statements, has disclosed that this estimated liability should be increased 170,000. Gray has two large blast furnaces that it uses in its manufacturing process. These furnaces must be periodically relined. Furnace A was relined in January 2014 at a cost of 230,000 and in January 2019 at a cost of 280,000. Furnace B was relined for the first time in January 2020 at a cost of 300,000. In Grays financial statements, these costs were expensed as incurred. Since a relining will last for 5 years, Grays management feels it would be preferable to capitalize and depreciate the cost of the relining over the productive life of the relining. Gray has decided to nuke a change in accounting principle from expensing relining costs as incurred to capitalizing them and depreciating them over their productive life on a straight-line basis with a full years depreciation in the year of relining. This change meets the requirements for a change in accounting principle under GAAP. Required: 1. For the years ended December 31, 2020 and 2019, prepare a worksheet reconciling income before income taxes as given previously with income before income taxes as adjusted for the preceding additional information. Show supporting computations in good form. Ignore income taxes and deferred tax considerations in your answer. The worksheet should have the following format: 2. As of January 1, 2020, compute the retrospective adjustment of retained earnings for the change in accounting principle from expensing to capitalizing relining costs. Ignore income taxes and deferred tax considerations in your answer.
- Depreciation Methods On January 1, 2019, Loeffler Company acquired a machine at a cost of $200,000. Loeffler estimates that it will use the machine for 4 years or 8,000 machine hours. It estimates that after 4 years the machine can be sold for $20,000. Loeffler uses the machine for 2,100 and 1,800 machine hours in 2019 and 2020, respectively. Required: Compute depreciation expense for 2019 and 2020 using the (1) straight-line, (2) double-declining-balance, and (3) units-of-production methods of depreciation.During 2019, Ryel Companys controller asked you to prepare correcting journal entries for the following three situations: 1. Machine A was purchased for 50,000 on January 1, 2014. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 25,000. The estimated residual value remains at 5,000, but the service life is now estimated to be 1 year longer than estimated originally. 2. Machine B was purchased for 40,000 on January 1, 2017. It had an estimated residual value of 5,000 and an estimated service life of 10 years. it has been depreciated under the double-declining-balance method for 2 years. Now, at the beginning of the third year, Ryel has decided to change to the straight-line method. 3. Machine C was purchased for 20,000 on January 1, 2018, Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value of the machine is 2,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry necessary for each situation to record depreciation expense for 2019.Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.