On July 1, 2019, Nuuty Inc., a calendar-year company, purchased a machine for a cash price of P800,000, with an estimated useful life of 10 years and estimated residual value of P70,000.  The company uses double declining balance method.  It is the company’s policy to depreciate its assets to the nearest month. During 2021, P131,500 was spent on an upgrade to the machine in order to improve its efficiency and increase the inflow of economic benefits over the machine’s remaining life.  In addition, management decided to change to the straight-line method of depreciation, maintaining its residual value of P70,000. What is the revised depreciation expense for the year ended December 31, 2021?

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 7RE: Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of...
icon
Related questions
Question

On July 1, 2019, Nuuty Inc., a calendar-year company, purchased a machine for a cash price of P800,000, with an estimated useful life of 10 years and estimated residual value of P70,000.  The company uses double declining balance method.  It is the company’s policy to depreciate its assets to the nearest month.

During 2021, P131,500 was spent on an upgrade to the machine in order to improve its efficiency and increase the inflow of economic benefits over the machine’s remaining life.  In addition, management decided to change to the straight-line method of depreciation, maintaining its residual value of P70,000.


What is the revised depreciation expense for the year ended December 31, 2021?

Expert Solution
steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Accounting for Impairment of Assets
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
CONCEPTS IN FED.TAX., 2020-W/ACCESS
CONCEPTS IN FED.TAX., 2020-W/ACCESS
Accounting
ISBN:
9780357110362
Author:
Murphy
Publisher:
CENGAGE L
SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
Accounting
ISBN:
9780357391266
Author:
Nellen
Publisher:
Cengage
SWFT Comprehensive Volume 2019
SWFT Comprehensive Volume 2019
Accounting
ISBN:
9780357233306
Author:
Maloney
Publisher:
Cengage
SWFT Comprehensive Vol 2020
SWFT Comprehensive Vol 2020
Accounting
ISBN:
9780357391723
Author:
Maloney
Publisher:
Cengage
Individual Income Taxes
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT