Required information Exercise 11-2 (Algo) Depreciation methods (LO11-2) [The following information applies to the questions displayed below.] On January 1, 2024, the Allegheny Corporation purchased equipment for $150,000. The estimated service life of the equipment is 10 years and the estimated residual value is $18,000. The equipment is expected to produce 240,000 units during its life. Required: Calculate depreciation for 2024 and 2025 using each of the following methods. Exercise 11-2 (Algo) Part 2 2. Double-declining-balance. Formula Amount for 2024 Amount for 2025 Double-Declining-Balance Method %- Depreciation Expense

Required information Exercise 11-2 (Algo) Depreciation methods (LO11-2) [The following information applies to the questions displayed below.] On January 1, 2024, the Allegheny Corporation purchased equipment for $150,000. The estimated service life of the equipment is 10 years and the estimated residual value is $18,000. The equipment is expected to produce 240,000 units during its life. Required: Calculate depreciation for 2024 and 2025 using each of the following methods. Exercise 11-2 (Algo) Part 2 2. Double-declining-balance. Formula Amount for 2024 Amount for 2025 Double-Declining-Balance Method %- Depreciation Expense

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter17: Property Transactions: §1231 And Recapture Provisions

Section: Chapter Questions

Problem 39P

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P11.2 (LO 1, 2) (Deprec. for partial periods - SL, Act., SYD, and Declining - Balance) The cost of equip. purchased by Charleston, Inc. on June 1, 2020, is $89,000. It is estimated that the machine will have a $5,000 salvage value at the end of it's service life. It's service life is estimated at 7 years, it's total working hours are estimated at 42,000, and it's total production is estimated at 525,000 units. During 2020, the machine was operated 6,000 hours and produced 55,000 units. During 2021, the machine was operated 5,500 hours and produced 48,000 units. Instructions: Compute deprec. expense on the machine for the year ending Dec. 31, 2020, and the year ending Dec. 31, 2021, using the following methods. a. Straight-line. b. Units-of-output. c. Working hours. d. Sum-of-the-years'-digits. e. Declining-balance (twice the straight-line rate).
6. On January 1, 2017, an entity purchased a machine for P5,280,000 and depreciated it by the straight linemethod using an estimated useful life of eight years with no residual value. On January 1, 2020, the entitydetermined that the machine has a useful life of six years from the date of acquisition with a residual value ofP480,000. What is the accumulated depreciation on December 31, 2020?a. 2,920,000 c. 3,200,000b. 3,080,000 d. 3,520,000 7. On January 1, 2018 an entity purchased for P4,800,000 machine with useful life of ten years on residual ofP200,000. The machine was depreciated by the double declining balance method. The entity changed to thestraight line method on January 1, 2020 and the residual value did not change. What is the accumulateddepreciation on December 31,2020?a. 2,087,000 c. 2.188,000b. 2,112,000 d. 2,015,200
P11.2 (LO 1,2) (Deprec. for partial periods - SL, Act., SYD, and Declining-Balance) The cost of equip. purchased by Charleston, Inc., on June 1, 2020, is $89,000. It is estimated that the machine will have a $5,000 salvage value at the end of it's service life. It's service life is estimated at 7 years, it's total working hours are estimated at 42,000, and it's total production is estimated at 525,000 units. During 2020, the machine was operated 6,000 hours and produced 55,000 units. During 2021, the machine was operated 5,500 hours and produced 48,000 units. Instructions: Compute deprec. expense on the machine for the year ending Dec. 31, 2020, and the year ending Dec. 31, 2021, using the following methods. A. Sum-of-the-years'-digits. B. Declining-balance (twice the straight-line rate).
E11-15 Asset Impairment On January 1, 2015, Vallahara Company purchased machinery for $650,000, which it installed in a rented factory. It is depreciating the machinery over 12 years by the straight-line method to a residual value of $50,000. Late in 2019, because of increasing competition in the industry, the company believes that its asset may be impaired and will have a remaining useful life of 5 years, over which it estimates the asset will produce total cash inflows of $1,000,000 and will incur total cash outflows of $825,000. The cash flows are independent of the company’s other activities and will occur evenly each year. Vallahara is not able to determine the fair value based on a current selling price of the machinery. Vallahara’s discount rate is 10%. Required: 1. Prepare schedules to determine whether, at the end of 2019, the machinery is impaired and, if so, the impairment loss to be recognized. 2. If the machinery is impaired, prepare the journal entry to record the…
E11-15 Asset Impairment On January 1, 2015, Vallahara Company purchased machinery for $650,000, which it installed in a rented factory. It is depreciating the machinery over 12 years by the straight-line method to a residual value of $50,000. Late in 2019, because of increasing competition in the industry, the company believes that its asset may be impaired and will have a remaining useful life of 5 years, over which it estimates the asset will produce total cash inflows of $1,000,000 and will incur total cash outflows of $825,000. The cash flows are independent of the company’s other activities and will occur evenly each year. Vallahara is not able to determine the fair value based on a current selling price of the machinery. Vallahara’s discount rate is 10%. Required: 4. Assuming that the recoverable amount of the machinery is determined to be $220,000 at the end of 2020, what entry will Vallahara make to record this increase in value under U.S. GAAP? Under IFRS?
P11-2 (Depreciation for Partial Periods --SL , Act., SYD, and Declining Balance ) The cost of equipment purchased by Charleston , Inc., on June 1 , 2014 is 89,000. It is estimated that the machine will have a 5,000 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 42, 000 and it's total production is estimated at 525,000 units. During 2014, the machine operated 5,500 hours and produced 48,000 units. Intructions : Compute depreciation expense on the machine for the year ending Decemeber 31 ,2014, and the year ending Decemeber 15 , 2014, using the following methods. D) Sum-of-the-years-digits.
H7. On January 1, 2016, Wheeler, Inc. purchased some equipment for $3,900. The equipment had an estimated life of five years and an expected residual value of $200. On July 1, 2018, the equipment was sold for $1,000. Wheeler uses straight-line depreciation. What was the amount of the loss or gain recognized in the sale? Group of answer choices $1,000 gain $1,850 gain $1,050 loss $3,900 loss Please show all step by step calculation
PQ16.07 Faster Company purchased equipment in 2010 for $104,000 with an estimated salvage value of $8,000 and a 10-year useful life. At December 31, 2016, there was $67,200 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On March 31, 2017, the equipment was sold for $21,000. Prepare the appropriate journal entries to remove the equipment from the books of Faster Company on March 31, 2017.
E11-2 Depreciation Methods Sorter Company purchased equipment for $200,000 on January 2, 2019. The equipment has an estimated service life of 8 years and an estimated residual value of $20,000. Required: Compute the depreciation expense for 2019 under each of the following methods: 1. straight-line 2. sum-of-the-years’-digits 3. double-declining-balance 4. Next Level What effect does the depreciation of the equipment have on the analysis of rate of return?
13 On January 2, 2020, VSG purchased a transportation equipment costing P2,400,000. The new asset has an estimated useful life of 8 years with no salvage value. VSG depreciates this type of asset using the straight-line method. On January 1, 2022, VSG determined that the machine had a remaining useful life of 6 years from the date of acquisition with no salvage value. How much is the revised depreciation for 2022?
8. An equipment was purchased for P600,000 on January 1, 2019. It had an estimated useful life of 10 years, estimated residual value of P100,000 and was depreciated using straight line method. On December 31, 2022, the estimated useful life is revised to 12 years and the estimated residual value is changed to P50,000. How much is the depreciation for 2023?9. Refer to no.8. This time, assume the depreciation method is changed to SYD on Dec. 31, 2022 and that there is no change in the original useful life and residual value. How much is the depreciation for 2023?
On 1/1/19, O. Corp acquired equipment at a cost of $867k. O. Corp adopted the sum-of-the-yrs-digits method of depreciation for this equipment and had been recording depreciation over an estimated life of 8 yrs, with no residual value. At the beginning of 2022, a decision was made to change to the straight-line method of depreciation for this equipment. The depreciation expense for 2022 would be $173400 $72250 $45156 $108375