Q#2The following data relate to the three machines acquired by Khalid Company onwwJanuary 2011:UsefulScrapMachineCostDepreciation MethodLifeValueА430,0006 Years40,000Straight LineB450,0004 Years50% Diminishing BalanceRequired:Calculate the annual depreciation for each machine for their whole life

Depreciation refers to the decrease in the monetary value of an asset occurred over time due to use,…

Q#2 The following data relate to the three machines acquired by Khalid Company on January 2011: Useful Scrap Machine Cost Depreciation Method Life Value A 430,000 6 Years 40,000 Straight Line B 450,000 4 Years 50% Diminishing Balance Required: Calculate the annual depreciation for each machine for their whole life

Q#2 The following data relate to the three machines acquired by Khalid Company on January 2011: Useful Scrap Machine Cost Depreciation Method Life Value A 430,000 6 Years 40,000 Straight Line B 450,000 4 Years 50% Diminishing Balance Required: Calculate the annual depreciation for each machine for their whole life

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

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 14RE: (Appendix 11.1) Auburn Company purchased an asset on January 1, Year 1, for 150,000. The asset has a...

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(Appendix 11.1) Depreciation for Financial Statements and Income Tax Purposes Dinkle Company purchased equipment for 50,000. The equipment has an estimated residual value of 5,000 and an expected useful life of 10 years. Dinkle uses straight-line depreciation for its financial statements. Required: What is the difference between the companys income before taxes reported on its financial statements and the taxable income reported on its tax return in each of the first 2 years of the assets life if the asset was purchased on January 2, 2019, and its MACRS life is 5 years?
Comparative Analysis: Under Armour, Inc., versus Columbia Sportswear Refer to the 10-K reports of Under Armour, Inc., and Columbia Sportswear that are available for download from the companion website at CengageBrain.com. Required: With regard to depreciation methods: a. What depreciation method does Under Armour use? What depreciation method does Columbia use? b. What are the typical useful lives of each companys operating assets? c. What effect will the useful lives have on the companys financial statements?
Effect of depreciation on net income Tuttle Construction Co. specializes in building replicas of historic houses. Tim Newman, president of Tuttle Construction, is considering the purchase of various items of equipment on July 1, 2014, for 400,000. The equipment would have a useful life of five years and no residual value. In the past, all equipment has been leased. For tax purposes, Tim is considering depreciating the equipment, by the straight-line method. He discussed the matter with his CPA and learned that, although the straight-line method could be elected, it was to his advantage to use the Modified Accelerated Cost Recovery System (MACKS) for tax purposes, lie asked for your advice as to which method to use for tax purposes. 1. Compute depreciation for each of the years (2014, 2015, 2016, 2017, 2018, and 2019) of useful life by (a) the straight-line method and (b) MACRS. In using the straight-line method, one-half year's depreciation should be computed for 2014 and 2019.Use the MACRS rates presented in Exhibit 9. 2. Assuming that income before depreciation and income tax is estimated to be 750,000 uniformly per year and that the income tax rate is 40%, compute the net income for each of the years 2014, 2015, 2016, 2017, 2018, and 2019 if (a) the straight-line method is used and (b) MACRS is used. 3. What factors would you present for Tim's consideration in the selection of a depreciation method?
LO.3 Renata Corporation purchased equipment in 2017 for 180,000 and has taken 83,000 of regular MACRS depreciation. Renata Corporation sells the equipment in 2019 for 110,000. What is the amount and character of Renatas gain or loss?
Q#2 The following data relate to the three machines acquired by Khalid Company on January 2011: Machine Cost Useful Life Scrap Value Depreciation Method A 430,000 6 Years 40,000 Straight Line B 450,000 4 Years - 50% Diminishing Balance Required: Calculate the annual depreciation for each machine for their whole life
Problem 5:On January 1, 2016, Greenhills Company acquired property, plant and equipment for each as follows:Cost Life in yearsLand 5,000,000Building 25,000,000 2513Machinery 10,000,000 5Equipment 3,000,000 10At the beginning of 2019, a revaluation of property items was made by professionally qualified valuers.While no change in the life of the assets was indicated, it was ascertained that replacement cost of theassets acquired in 2016 had increased by the following percentage:Land 100%Building 80%Machinery 50%Equipment 40%It was authorized that such revaluation be recorded in the accounts and that depreciation be recorded onthe basis of revalued amount.Required:a. Prepare journal entry to record the revaluation on January 1, 2019.b. Prepare the journal entry to record the depreciation for 2019.c. Prepare the journal entry to record the piecemeal realization of the revaluation surplus.d. Present the assets in the statement of financial position on December 31, 2019.
Q.3 (a): Depreciation is allocation of cost concept ,not a valuation concept,explain this statement . (b): Huma Company purchased various types of Assets. Details are as follows: Assets Date of Purchase Cost Estimated Life /Rate Method Building January 1, 2004 Rs. 8,000,000 20 Years Straight Line Machinery July 1 , 2005 300,000 20% Diminishing Balance Equipment April 1, 2006 440,000 5 Years Sum of the years digits On January 10, 2006 the company paid Rs. 100,000 for replacing the plaster of walls of building. It is estimated that the new plaster will extend the life of building from an originally estimated 40 years to a total of 50 years. Required: Compute the Depreciation Expense for the year 2004, 2005 and 2006 Record the extra ordinary repair of building in General Journal Record the Depreciation Expense for the year ended December 31, 2006 Prepare a Partial Balance Sheet as on December 31, 2006
Q.4 On January 2, 2011, Jansing Corporation acquired a new machine with an estimated useful life of five years. The cost of the equipment was $40,000 with a residual value of $5,000. Prepare a complete depreciation table under the two depreciation methods listed below. Straight-line. 200 percent declining-balance. 150 percent declining-balance with a switch to straight-line when it will maximize depreciation expense. Q.5 Swanson & Hiller, Inc., purchased a new machine on September 1, 2008 at a cost of $108,000. The machine’s estimated useful life at the time of the purchase was five years, and its residual value was $8,000. Instructions Prepare a complete depreciation schedule, beginning with calendar year 2008, under each of the methods listed below (assume that the half-year convention is used): Straight-line. 200 percent declining-balance. 150 percent declining-balance, switching to straight-line when that maximizes the expense.
Q.3 On January 2, 2011, Jansing Corporation acquired a new machine with an estimated useful life of five years. The cost of the equipment was $40,000 with a residual value of $5,000. Prepare a complete depreciation table under the two depreciation methods listed below. Straight-line. 200 percent declining-balance. 150 percent declining-balance with a switch to straight-line when it will maximize depreciation expense.
Q2. A plant asset acquired on October 1, 2014, at a cost of $400,000 has an estimated useful life of 10 years. The salvage value is estimated to be $40,000 at the end of the asset's useful life. Instructions Determine the depreciation expense for the first two years using: (a) the straight-line method. (b) the double-declining-balance method.
QUESTION 3 MacPro Property Bhd acquired an investment property on 1 January 2015 and measured it using the cost model. On 1 January 2018, MacPro Property Bhd changed the accounting policy and used the fair value model to measure investment property. The acquisition cost of the property was RM70 million and the estimated useful life was 35 years. The fair values of the property were measured as below: Date RM (in million) 31/12/2015 72 31/12/2016 74 31/12/2017 78 31/12/2018 83 Profit after depreciation on investment property but before tax for 2017 and 2018 were RM80 million and RM95 million, respectively. Retained earnings brought forward on 1 January 2017 and 2018, were RM150 million and RM210 million, respectively. Assume that tax rate for 2017 and 2018 was 25%. REQUIRED: Discuss the accounting treatment of the above transaction in accordance to MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors. Prepare the…
1. Wang Company uses the double declining balance (DDB) method of depreciation on its fixed assets. On January 1, 2009, Wang purchased a machine: Cost = $125,500Salvage value = $13,375Useful life = 5 years Important: Round all answers to the nearest dollar (e.g. $2,535). What is the balance of Accumulated Depreciation - Machine on December 31, 2010? $ 2. Wang Company uses the double declining balance (DDB) method of depreciation on its fixed assets. On January 1, 2009, Wang purchased a machine: Cost = $125,500Salvage value = $13,375Useful life = 5 years Important: Round all answers to the nearest dollar (e.g. $2,535). What is the book value of the machine on December 31, 2011? 3. Wang Company uses the double declining balance (DDB) method of depreciation on its fixed assets. On January 1, 2009, Wang purchased a machine: Cost = $125,500Salvage value = $13,375Useful life = 5 years Important: Round all answers to the nearest dollar (e.g. $2,535). What is Depreciation Expense on the…