Ventura Corporation purchased machinery on January 1, 2019 for ₱840,000. The company used the sum-of-the-years’-digits method and no salvage value to depreciate the asset for the first two years of its estimated six-year life. In 2020, Ventura changed to the straight-line depreciation method for this asset. The following facts pertain: 2019 2020 Straight-line
Ventura Corporation purchased machinery on January 1, 2019 for ₱840,000. The company used the sum-of-the-years’-digits method and no salvage value to depreciate the asset for the first two years of its estimated six-year life. In 2020, Ventura changed to the
2019 2020
Straight-line ₱140,000 ₱140,000
Sum-of-the-years’-digits 240,000 200,000
1. Ventura is subject to a 40% tax rate. The cumulative effect of this accounting change on beginning
a. ₱180,000 c. ₱96,000
b. ₱160,000 d. ₱0
2. The amount that Ventura should report for depreciation expense on its 2021 income statement is
a. ₱160,000 c. ₱100,000
b. ₱140,000 d. ₱120,000
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