Problem 27-3 (IAA) At the beginning of current year, Definite Company acquired the following assets: Residual Useful life Cost value in years Machinery 310,000 10,000 5 110,000 10,000 10 Office equipment Building 1,600,000 100,000 15 Delivery equipment 430,000 30,000 Required: a. Compute the composite depreciation rate. b. Compute the composite life. C Prepare journal entry to record the depreciation for the current year.
Problem 27-3 (IAA) At the beginning of current year, Definite Company acquired the following assets: Residual Useful life Cost value in years Machinery 310,000 10,000 5 110,000 10,000 10 Office equipment Building 1,600,000 100,000 15 Delivery equipment 430,000 30,000 Required: a. Compute the composite depreciation rate. b. Compute the composite life. C Prepare journal entry to record the depreciation for the current year.
Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter9: Long-term Assets: Fixed And Intangible
Section: Chapter Questions
Problem 9.17EX: Entries for sale of fixed asset Equipment acquired on January 8 at a cost of 168,000 has an...
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Transcribed Image Text:Problem 27-3 (IAA)
At the beginning of current year, Definite Company acquired
the following assets:
Residual
Useful life
Cost
value
in years
Machinery
310,000
10,000
5
Office equipment 000, 110,000
Building
10,000
10
1,600,000
100,000
15
Delivery equipment
430,000
30,000
4
Required:
a. Compute the composite depreciation rate.
b. Compute the composite life.
c
Prepare journal entry to record the depreciation for the
current year.
Problem 27-4 (ACP) pred
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Happy Company owned a power plant which consisted of the
following assets all acquired at the beginning of current year:
Residual
Useful life
Cost
value
in years
6,100,000
100,000
20
Building 00
Machinery do
Equipment
14:4
50,000
5
2,550,000
1,030,000
000,030,000
10
Required:
a. Compute the composite rate.
b. Compute the composite life.
c. Prepare journal entry to record the depreciation for the
current year following the composite method.
d.
Prepare journal entry to record the retirement of the
machinery at the end of the fifth year assuming the proceeds
from retirement amount to P40,000.
e. Prepare journal entry to record the depreciation for the
sixth year following the composite method.
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Transcribed Image Text:Problem 27-5 (AICPA Adapted)
A T-TA
Silent Company provided the following schedule of
machinery:
Estimated
residual value
Useful life
in years
Total cost
550,000
50,000
20
Machine A
200,000
20,000
Machine B
15
5
40,000
Machine C
What is the composite life of the assets?
13.3
a.
b. 16.0
c. 18.0
d. 19.8
Problem 27-6 (IAA)
Norraine Company used the composite method of
depreciation based on a composite rate of 25%.
At the beginning of 2020, the total cost of equipment was
P5,000,000 with a total residual value of P600,000. The
accumulated depreciation was P3,000,000 at that time.
In January 2020, the entity purchased an equipment for
P2,500,000 with no residual value.
At the end of 2020, the entity sold an equipment with an
original cost of P1,000,000 and a residual value of P200,000
for P350,000. This asset was acquired on January 1, 2018.
1. What is the depreciation for 2020?
a. 1,625,000
b. 1,875,000
c. 1,125,000
d. 975,000
2. What is the gain or loss from the derecognition of the
asset on December 31, 2020?
a. 100,000 gain
b. 150,000 loss
C.
50,000 loss
0
d.
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