I need help with this question and need to show work explanation correctly. PI12 (L01,2) (Derre for Portial Peciods-SLActySID, and Declining Balance) The cost of eauip. PurchastsChaclestony Incy on June I, 2020, is $89a0.It is estimated that the machine Will have a5,000 Salvage valye at the end of iP's service life.It's service life is estimated at 7 Yearsyit's total Working hours are estimated at 42,000g and itstotal Productinn is Pstimated qt 525,000 units.During 2olo the machine was Operated6,000 haurs and Produced 55,000 ynits. During 202I, themachine was operated 5,500 hours and produced 4S,000 units.Instructions.ComPute deprec, expense on the machine for the Yearending Dec. 31,20 and the Year ending Dec31,202using the fallowiog methods.a straight-lineb/ Unlts-of-outputWorking hoursSum-of-the- Yours -diaits.Declining-balance twice the straight-line rate).

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Answered: PI1.2 (LO1,2) (DerE for Partial Peciods…

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

Chapter12: Intangibles

Section: Chapter Questions

Problem 7MC

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14. On March 2, 2021, HABIBIYUCK bought an equipment costing P1,200,000. It is the Company’s policy to depreciate long-lived assets using the double declining balance. The equipment had a useful life of 10 years. How much is the carrying value of the above asset at December 31, 2023?
Hardy Man, Inc. incurred repair costs of a machine in 2021 for P 30,000 and erroneously capitalized the cost to machinery account. The company's policy would have called for the depreciation of the asset over its estimated useful life of five years with a 10% salvage value by the straight-line method. Hardy Man's policy is to take one half year's depreciation in the year of acquisition and one-half in the year of disposal. QUESTION: What is the impact of the error in 2022 net income?
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On 1 October 2019, company X (with a year-end as at 30th Sept) acquired an item of machinery for£10,720. During the year, the machinery had got damaged and was underperforming, although it was stillbeing used. By 30 September 2020, following the damage, the item of machinery had an estimatedremaining useful life of two years, a value in use of £6,300 and a fair value of £6,400. The costs to sell theitem of machinery amounted to £500. Company X depreciates machinery on a reducing balance basis ata rate of 20% per annum.Compute the impairment loss in relation to the aforementioned item of machinery to be shown in companyX’s income statement for the year ending 30th September 2020.
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. On January 11, 2022, The Hughes Company applied for a tradename. Legal costs associated with the application were P20,000. In January 2023, the company incurred P8,000 of legal fees in a successful defense of its tradename. The tradename was not impaired in 2022 and 2023. RequiredCompute the ending carrying value of the tradename for 2022 and 2023. Should the company amortize the tradename? *Note: Show the solution step by step with formula
Holt Developments Ltd. put an asset in service on January 1, 2021. Its cost was $432,000, its predicted service life was six years, and its expected residual value was $43,200. The company decided to use double-declining-balance depreciation. After consulting with the company’s auditors, management decided to change to straight-line depreciation in 2023, without changing either the original service life or residual value.Required:a. What is depreciation expense for 2023? b. Calculate the effect of this change on retained earnings.

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