total accumulated depreciation to be reported in the balance sheet on December 2021.
Q: On March 2, 2021, HABIBIYUCK bought an equipment costing P1,200,000. Itis the company’s policy to…
A: Formula: Depreciation rate = ( 100 / Useful life ) x 2
Q: On January 1, 2016, Indians Corporation bought a factory equipment for P924,000 salvage value was…
A: Under Double declining balance method, depreciation is charged at an accelerated rate in the initial…
Q: The December 31, 2020 balance sheet of Swifty Company showed Equipment of $75,000 and Accumulated…
A: Revised annual depreciation = Depreciable cost / Remaining useful life
Q: On January 1, 2021, Piling Company has Land, Building and Machinery with brought forward balances…
A: Total accumulated depreciation on December 31, 2021 = Total accumulated depreciation on January 01,…
Q: n March 2, 2021, HABIBIYUCK bought an equipment costing P1,200,000. It is the Company’s policy to…
A: Solution: Depreciation rate - SLM = 1/10 = 10% Deprecation rate - DDB = 10%*2 = 20% Depreciation for…
Q: On January 1, 2021, PANCHITAS CAFÉ purchased equipment for $180,000. The equipment had an estimated…
A: SLM depreciation = (cost - salvage value)/life = (180000-40000)/10 = 14000 SLM rate = SLM…
Q: Gary V Corporation has Office fixtures with a cost of P170,000 and an estimated salvage value of…
A: Depreciation is the allocation of cost of asset over the useful life of the asset. There are several…
Q: A company purchased factory equipment on April 1, 2018 for $60,000. t estimated that the equipment…
A: Ans. Calculation of depreciation as per SLM: Depreciation = Cost - Residual value/useful life
Q: The December 31, 2020 balance sheet of Swifty Company showed Equipment of $75,000 and Accumulated…
A: Depreciable cost = Original cost - Accumulated depreciation - Salvage value
Q: The motor vehicle was originally obtained at $120,000 Is $60,608 the accumulated depreciation as at…
A: Depreciation under Double-declining method=1Useful Life×2
Q: Glacier Company purchased a machine which was installed and put into service on January 1, 2019 at a…
A: Depreciation is computed by dividing the depreciable value of the asset divided by the useful life…
Q: Bonita Industries purchased a machine for $66800 on July 1, 2020. The company intends to depreciate…
A: Double-declining balance method (Accelerated method): In this method of depreciation, the…
Q: A machine was purchased at a cost of $9,600,000 on June 30, 2020. The machine’s estimated salvage…
A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…
Q: Drago Company purchased equipment on January 1, 2021, at a total invoice cost of $1,200,000. The…
A: working notes: Depreciation = (1,200,000 – 30,000)/5 useful life Total accumulated depreciation (2…
Q: On January 1, 2018, Bray Company purchased for P2,400,000 a machine with a useful life of ten years…
A: Formula: Rate of Deprecation for DDB= 100%Life of Asset×2 Rate of Depreciation for SL= 100%Remaining…
Q: Bataan Company purchased a machinery that was installed and ready for use on January 1, 2019 at a…
A: Depreciation rate under double declining rate = = 2 / useful life x 100% Given…
Q: aithful Company purchased an equipment on January 2, 2021 for P3,000,000. The equipment had an…
A: DDB rate = (2/Useful life) = (2/5) = 40% Depreciation expense for 2021 = P3,000,000 x 40% =…
Q: A company purchased a computer system on January 1, 2021 for S 1,600,00 and sold it one year later…
A: Formula: Straight line method Depreciation = ( Asset cost - Salvage value ) / Useful life years
Q: A company purchased a computer system on January 1, 2021 for $ 1,600,00 and sold it one year later…
A: Formula: Straight line method depreciation expense = ( Asset cost - Salvage value ) / Useful life…
Q: Bataan Company purchased a machinery that was installed and ready for use on January 1, 2019 at a…
A: Depreciation expense is the cost portion which is allocated to the fixed assets of the company and…
Q: On the first day of its current fiscal year, Lupao Corporation purchased equipment costing P400,000…
A: Under double depreciation expense, the depreciation is calculated at double rate of straight line…
Q: Sheridan Pants Company acquires a delivery truck on April 6, 2021, at a cost of $40,000. The truck…
A: The Numerical has covered the concept of Depreciation Expenses. The Double Declining Method is a…
Q: a. Peters Co. bought a machine for $15,790 on July 1, 2020. The estimated life of the machine was…
A: 1. Straight-line depreciation method: Depreciation per annum = (Purchase price - salvage value) /…
Q: What is the debit amount for the depreciation expense? What is the credit amount for accumulated…
A: Depreciation expenses is the amount of an asset's cost that has been allocated and reported as an…
Q: The following additional information is available at July 31, 2021: (i) Rent of $510,000 was paid on…
A: Adjusting Entry – Adjusting Entries are the entries that make the accrual principle work for the…
Q: Beckman Enterprises purchased a depreciable asset on October 1, Year 1 at a cost of $152,000. The…
A: Book value of an asset is the value of asset which is reported on the financial statement of the…
Q: 25-3) Colorado Company has been using the sum-of-the-years'-digits depreciation method to depreciate…
A: Sum of the digits = n(n+1) / 2 n = the useful life in years
Q: Faithful Company purchased an equipment on January 2, 2021 for P3,000,000. The equipment had an…
A: DDB rate = (2 / Useful life) = 40% Depreciation expense for 2021 = P3,000,000 x 40% = P1,200,000 =…
Q: On January 1, 2015, Indians Corporation bought a factory equipment for 924,000 salvage value was…
A: Introduction: Depreciation: Decreasing value of fixed assets over its useful life period called as…
Q: A company purchased factory equipment on April 1, 2021 for $128,000. It is estimated that the…
A: Depreciation expense: Depreciation expense is the reduction in a particular asset due to its use or…
Q: what is the depreciation expense for the year ended December 31, 2021?
A: Formula: Depreciation Expenses= Remaining Useful life of the AssetSum of The Year's…
Q: On January 1, 2021 the Hogan Manufacturing Company purchased a machine for $250,000. The company…
A: Depreciation is an expense charged against the income for the wear and tear of the equipment .…
Q: Sesame Company purchased a computer system for $74,000 on January 1, 2019. It was depreciated based…
A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…
Q: On July 1, 2020, Concord Corporation purchased factory equipment for $283000. Salvage value was…
A: Solution: Under Double declining balance method of depreciation, depreciation is based on double the…
Q: On December 31, 2020, RJ Co. had a 5-year old building with a cost of P10,000,000.00 and accumulated…
A: Depreciation under Straight line method = (Cost - Salvage Value) / estimated useful life Cost of…
Q: Sami Products purchased a machine for $85,000 on July 1, 2020. The company intends to depreciate it…
A: Double declining balance method is a method of depreciation under which depreciation is charged as…
Q: Apple Co. purchased a machine on January 1, 2019, for P180,000 cash. The machine has an estimated…
A: following is the answer to the given question
Q: On September 19, 2020, Sunland Company purchased machinery for $478000. Salvage value was estimated…
A: Solution: Under sum of years' digits method of depreciation. Depreciation is based on sum of digits…
Q: n August 31, 2019, CAMELLIA Company purchased a new machinery for ₱540,000. The machinery has an…
A: Solution: Purchase price of machinery = ₱540000 Estimated useful life = 5 years Estimated salvage…
Q: Bonita Company purchased a new plant asset on April 1, 2020, at a cost of $738,000. It was estimated…
A: Double declining depreciation rate = Straight line depreciation rate x 2 = (100/20 years) x 2 = 10%…
Q: sing the double-declining balance method. Show your calculations Blank 1. Fill in the blank,…
A: Depreciation is a wear and tear of an asset. There are various methods of depreciation. (1) units of…
Q: depreciation for that first year using both the Straight-Line Method and the Units of Activity…
A: Depreciation Under straight line - Yearly depreciation - ( Historical cost - Salvage Value )/Useful…
Q: BLACK JACK Company purchased an automotive equipment on June 30, 2018 for P3,000,000. At the date of…
A: Depreciation is charged on the value of fixed assets due to normal usage , wear and tear and change…
Q: On January 1, 2020, ABC Company purchased factory equipment for 3,000,000. Estimated useful life of…
A: Depreciation means the amount fixed assets written off due to normal wear and tear , normal usage ,…
Q: On October 1, 2015, PCU Company purchased machinery for P1,900,000. Salvage value was estimated to…
A: Given information, Cost of machinery =P1,900,000 Salvage value =P100,000 Useful life = 8 years Sum…
Q: On January 10, 1997 NXT CO. Company purchased a building by paying $75,000. The building has an…
A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…
Q: LA Clippers Company started its business operation on June 1, 2019 and showed the following data…
A: Depreciation is computed under the following methods which are enumerated as below: 1. Straight…
Q: Workman Company purchased a machine on January 2, 2020, for $800,000. The machine has an estimated…
A: Accumulated depreciation: The total amount of depreciation expense deducted, from the time asset…
Q: Bergen Company purchased factory equipment which was installed and put into service January 1, 2018…
A: The double-declining method represents the reduction of the depreciation in the value of assets with…
Q: Equipment was purchased for $86200 on January 1, 2021. Freight charges amounted to $2800 and there…
A: First we need to find capitalized cost of asset Then depreciable value of asset is to be found…
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.
On January 1, 2021, Irene’s Corporation bought a factory equipment for P924,000 salvage value was estimated at P24,000. The asset will be depreciated over 10 years using the double declining balance method. How much is the total accumulated
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- On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.
- Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used for deliveries, has the following characteristics: Estimated life: 5 years Estimated residual value: 3,000 Depreciation method for financial statements: straight-line method Depreciation for income tax purposes: MACRS (3-year life) From 2019 through 2023, each year, Hunter had sales of 100,000, cost of goods sold of 60,000, and operating expenses (excluding depreciation) of 15,000. The truck was disposed of on December 31, 2023, for 2,000. Required: 1. Prepare an income statement for financial reporting through pretax accounting income for each of the 5 years, 2019 through 2023. 2. Prepare, instead, an income statement for income tax purposes through taxable income for each of the 5 years, 2019 through 2023. 3. Compare the total income for all 5 years under Requirements 1 and 2.Albany Corporation purchased equipment at the beginning of Year 1 for 75,000. The asset does not have a residual value and is estimated to be in service for 8 years. Calculate the depreciation expense for Years 1 and 2 using the double-declining-balance method. Round to the nearest dollar.Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual value was 500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: 1. Compute depredation expense (rounded to the nearest dollar) for 2019 and 2020 using the: a. straight-line method b. sum-of-the-years-digits method c. double-declining-balance method 2. Next Level Which method produces the highest book value at the end of 2020? 3. Next Level Which method produces the highest charge to income in 2020? 4. Next Level Over the life of the asset, which method produces the greatest amount of depreciation expense?
- Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of zero. Bliss uses the straight -line method of depreciation. At the beginning of the sixth year, the assets book value is 200,000 and Bliss changes the estimate of the assets life to 25 years, so that 20 years now remain in the assets life. Explain how this change will be accounted for in Blisss financial statements, and compute the current and future annual depreciation expense.Gray Companys financial statements showed income before income taxes of 4,030,000 for the year ended December 31, 2020, and 3,330,000 for the year ended December 31, 2019. Additional information is as follows: Capital expenditures were 2,800,000 in 2020 and 4,000,000 in 2019. Included in the 2020 capital expenditures is equipment purchased for 1,000,000 on January 1, 2020, with no salvage value. Gray used straight-line depreciation based on a 10-year estimated life in its financial statements. As a result of additional information now available, it is estimated that this equipment should have only an 8-year life. Gray made an error in its financial statements that should be regarded as material. A payment of 180,000 was made in January 2020 and charged to expense in 2020 for insurance premiums applicable to policies commencing and expiring in 2019. No liability had been recorded for this item at December 31, 2019. The allowance for doubtful accounts reflected in Grays financial statements was 7,000 at December 31, 2020, and 97,000 at December 31, 2019. During 2020, 90,000 of uncollectible receivables were written off against the allowance for doubtful accounts. In 2019, the provision for doubtful accounts was based on a percentage of net sales. The 2020 provision has not yet been recorded. Net sales were 58,500,000 for the year ended December 31, 2020, and 49,230,000 for the year ended December 31, 2019. Based on the latest available facts, the 2020 provision for doubtful accounts is estimated to be 0.2% of net sales. A review of the estimated warranty liability at December 31, 2020, which is included in other liabilities in Grays financial statements, has disclosed that this estimated liability should be increased 170,000. Gray has two large blast furnaces that it uses in its manufacturing process. These furnaces must be periodically relined. Furnace A was relined in January 2014 at a cost of 230,000 and in January 2019 at a cost of 280,000. Furnace B was relined for the first time in January 2020 at a cost of 300,000. In Grays financial statements, these costs were expensed as incurred. Since a relining will last for 5 years, Grays management feels it would be preferable to capitalize and depreciate the cost of the relining over the productive life of the relining. Gray has decided to nuke a change in accounting principle from expensing relining costs as incurred to capitalizing them and depreciating them over their productive life on a straight-line basis with a full years depreciation in the year of relining. This change meets the requirements for a change in accounting principle under GAAP. Required: 1. For the years ended December 31, 2020 and 2019, prepare a worksheet reconciling income before income taxes as given previously with income before income taxes as adjusted for the preceding additional information. Show supporting computations in good form. Ignore income taxes and deferred tax considerations in your answer. The worksheet should have the following format: 2. As of January 1, 2020, compute the retrospective adjustment of retained earnings for the change in accounting principle from expensing to capitalizing relining costs. Ignore income taxes and deferred tax considerations in your answer.
- Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one it expects to use the truck for 26,000 miles. Calculate the annual depreciation expense.Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assets life, and create the journal entry for year five.