QUESTION 3 Far East Company bought a machinery on 1 March 2015 costing $30,000 with a residual value of $6,000. The estimated years of useful life is 8 years. On I January 2017, it revised the estimated years of useful life from the original 8 years to 6 years, total 4 years remaining and with no residual value left. On 1 January 2019, the company sold its machinery at $15,000. The machinery was depreciated on a straight-line basis, with depreciation for partial years rounded to the nearest month. The company's financial year ended was on 31 December. Required: (a) Compute the yearly depreciation expense for Years 2015 to 2018. (b) Calculate the gain or loss on the disposal of the machinery on I January 2019. (c) Prepare the Journal Entry for the sale of the machinery on I January 2019. (Explanation of Journal Entry is required.) (SHOW WORKINGS)

QUESTION 3 Far East Company bought a machinery on 1 March 2015 costing $30,000 with a residual value of $6,000. The estimated years of useful life is 8 years. On I January 2017, it revised the estimated years of useful life from the original 8 years to 6 years, total 4 years remaining and with no residual value left. On 1 January 2019, the company sold its machinery at $15,000. The machinery was depreciated on a straight-line basis, with depreciation for partial years rounded to the nearest month. The company's financial year ended was on 31 December. Required: (a) Compute the yearly depreciation expense for Years 2015 to 2018. (b) Calculate the gain or loss on the disposal of the machinery on I January 2019. (c) Prepare the Journal Entry for the sale of the machinery on I January 2019. (Explanation of Journal Entry is required.) (SHOW WORKINGS)

Name: QUESTION 3Far East Company bought a machinery on 1 March 2015 costing
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Description: QUESTION 3Far East Company bought a machinery on 1 March 2015 costing S30,000 with a residualvalue of $6,000. The estimated years of useful life is 8 years.On 1 January 2017, it revised the estimated years of useful life from the original 8 years to

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles

Section: Chapter Questions

Problem 8.5E: Change in Estimate Assume that Bloomer Company purchased a new machine on January 1, 2016, for...

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Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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Depreciation On July 1, 2016, Dexter Corp. buys a computer system for $260,000 in cash. Assume that the computer is expected to have a four-year life and an estimated salvage value of $20,000 at the end of that time. Required Prepare the journal entry to record the purchase of the computer on July 1, 2016. Compute the depreciable cost of the computer. Using the straight-line method, compute the monthly depreciation. Prepare the adjusting entry to record depreciation at the end of July 2016. Compute the computers carrying value that will be shown on Dexters balance sheet prepared on December 31, 2016.
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