The business acquires equipment for a total cost of ₱1M. Instead of expensing right away the ₱1M cost, the business allocates it over the 5-year useful life of the equipment. Meaning, the business will recognize the ₱1M cost as expense on a piecemeal basis or ₱200K per year (1M ÷ 5 years). The portion of the cost that is expensed during the period is recorded as Bad debts expense. Equipment. Allowance for bad debts. Depreciation expense

The business acquires equipment for a total cost of ₱1M. Instead of expensing right away the ₱1M cost, the business allocates it over the 5-year useful life of the equipment. Meaning, the business will recognize the ₱1M cost as expense on a piecemeal basis or ₱200K per year (1M ÷ 5 years). The portion of the cost that is expensed during the period is recorded as Bad debts expense. Equipment. Allowance for bad debts. Depreciation expense

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 5PA: Jada Company had the following transactions during the year: Purchased a machine for $500,000 using...

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Jada Company had the following transactions during the year: Purchased a machine for $500,000 using a long-term note to finance it Paid $500 for ordinary repair Purchased a patent for $45,000 cash Paid $200,000 cash for addition to an existing building Paid $60,000 for monthly salaries Paid $250 for routine maintenance on equipment Paid $10,000 for major repairs Depreciation expense recorded for the year is $25,000 If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and Equipment section of Jadas balance sheet resulting from this years transactions? What amount did Jada report on the income statement for expenses for the year?
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Jada Company had the following transactions during the year:• Purchased a machine for $500,000 using a long-term note to finance it• Paid $500 for ordinary repair• Purchased a patent for $45,000 cash• Paid $200,000 cash for addition to an existing building• Paid $60,000 for monthly salaries• Paid $250 for routine maintenance on equipment• Paid $10,000 for major repairs• Depreciation expense recorded for the year is $25,000If all transactions were recorded properly, what is the amount of increase to the Property, Plant, andEquipment section of Jada’s balance sheet resulting from this year’s transactions? What amount did Jadareport on the income statement for expenses for the year?