GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
9th Edition
ISBN: 9781260089042
Author: J. David Spiceland
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 20, Problem 20.4BE
Change in depreciation methods
• LO20–3
Irwin, Inc., constructed a machine at a total cost of $35 million. Construction was completed at the end of 2014 and the machine was placed in service at the beginning of 2015. The machine was being
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Current Attempt in Progress
X Your answer is incorrect.
Metlock Company purchased equipment for $285,600 on October 1, 2025. It is estimated that the equipment will have a useful life
of 8 years and a salvage value of $12,000. Estimated production is 48,000 units and estimated working hours are 19,000. During 2025,
Metlock uses the equipment for 530 hours and the equipment produces 1,100 units.
Compute depreciation expense under each of the following methods. Metlock is on a calendar-year basis ending December 31. (Round
rate per hour and rate per unit to 2 decimal places, e.g. 5.35 and final answers to O decimal places, e.g. 45,892.)
(a)
(b)
(c)
Straight-line method for 2025
(e)
Activity method (units of output) for 2025
Activity method (working hours) for 2025
(d) Sum-of-the-years'-digits method for 2027
Double-declining-balance method for 2026
$
ta
tA
LA
8531
5.69
7615
51187
66797
32
Assume that on 31st December 2014 Ali and Sons Company purchased a machine for OMR 20000 and expecting the salvage value after its useful life of 5 years is OMR 2000. Calculate the book value of the machine on 31st December 2018 by following Straight line depreciation method.
a.
OMR 5600
b.
OMR 14000
c.
OMR 9200
d.
OMR 2000
Clear my choice
Exercise 11-24 (Algo) Change in principle; change in depreciation methods [LO11-2, 11-6]
Alteran Corporation purchased office equipment for $2.2 million at the beginning of 2022. The equipment is being depreciated over a
10-year life using the double-declining-balance method. The residual value is expected to be $700,000. At the beginning of 2024 (two
years later), Alteran decided to change to the straight-line depreciation method for this equipment.
Required:
Prepare the journal entry to record depreciation for the year ended December 31, 2024.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round
intermediate calculations. Enter your answers in whole dollars.
View transaction list View journal entry worksheet
Event
1
No
1
General Journal
Depreciation expense
Accumulated depreciation
Debit
Credit
Tecnal
Chapter 20 Solutions
GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
Ch. 20 - Prob. 20.1QCh. 20 - There are three basic accounting approaches to...Ch. 20 - Prob. 20.3QCh. 20 - Lynch Corporation changes from the...Ch. 20 - Sugarbaker Designs Inc. changed from the FIFO...Ch. 20 - Most changes in accounting principles are recorded...Ch. 20 - Southeast Steel, Inc., changed from the FIFO...Ch. 20 - Prob. 20.8QCh. 20 - Its not easy sometimes to distinguish between a...Ch. 20 - For financial reporting, a reporting entity can be...
Ch. 20 - Prob. 20.11QCh. 20 - Describe the process of correcting an error when...Ch. 20 - Prob. 20.13QCh. 20 - If it is discovered that an extraordinary repair...Ch. 20 - Prob. 20.15QCh. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in inventory methods; average cost method...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in depreciation methods LO203 Irwin, Inc.,...Ch. 20 - Prob. 20.5BECh. 20 - Book royalties LO204 Three programmers at Feenix...Ch. 20 - Warranty expense LO204 In 2017, Quapau Products...Ch. 20 - Change in estimate; useful life of patent LO204...Ch. 20 - Prob. 20.9BECh. 20 - Error correction LO206 In 2018, internal auditors...Ch. 20 - Prob. 20.11BECh. 20 - Error correction LO206 In 2018, the internal...Ch. 20 - Change in principle; change in inventory methods ...Ch. 20 - Change in principle; change in inventory methods ...Ch. 20 - Change from the treasury stock method to retired...Ch. 20 - Change in principle; change to the equity method ...Ch. 20 - Prob. 20.5ECh. 20 - FASB codification research LO202 Access the FASB...Ch. 20 - Change in principle; change in inventory cost...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in depreciation methods LO203 For...Ch. 20 - Change in depreciation methods LO203 The Canliss...Ch. 20 - Book royalties LO204 Dreighton Engineering Group...Ch. 20 - Loss contingency LO204 The Commonwealth of...Ch. 20 - Warranty expense LO204 Woodmier Lawn Products...Ch. 20 - Prob. 20.15ECh. 20 - Accounting change LO204 The Peridot Company...Ch. 20 - Change in estimate; useful life and residual value...Ch. 20 - Classifying accounting changes LO201 through...Ch. 20 - Error correction; inventory error LO206 During...Ch. 20 - Error corrections; investment LO206 Required: 1....Ch. 20 - Prob. 20.21ECh. 20 - Prob. 20.22ECh. 20 - Prob. 20.23ECh. 20 - Inventory errors LO206 Indicate with the...Ch. 20 - Classifying accounting changes and errors LO201...Ch. 20 - Change in inventory costing methods; comparative...Ch. 20 - P 20-2 Change in principle; change in method of...Ch. 20 - Change in inventory costing methods; comparative...Ch. 20 - Change in inventory methods LO202 The Rockwell...Ch. 20 - Change in inventory methods LO202 Fantasy...Ch. 20 - Change in principle; change in depreciation...Ch. 20 - Depletion; change in estimate LO204 In 2018, the...Ch. 20 - Accounting changes; six situations LO201, LO203,...Ch. 20 - Prob. 20.9PCh. 20 - Inventory errors LO206 You have been hired as the...Ch. 20 - Error correction; change in depreciation method ...Ch. 20 - Accounting changes and error correction; seven...Ch. 20 - Prob. 20.13PCh. 20 - Prob. 20.14PCh. 20 - Prob. 20.15PCh. 20 - Prob. 20.16PCh. 20 - Prob. 20.17PCh. 20 - Integrating Case 201 Change to dollar-value LIFO ...Ch. 20 - Prob. 20.2BYPCh. 20 - Prob. 20.3BYPCh. 20 - Analysis Case 204 Change in inventory methods;...Ch. 20 - Prob. 20.5BYPCh. 20 - Prob. 20.6BYPCh. 20 - Analysis Case 208 Various changes LO201 through...Ch. 20 - Analysis Case 209 Various changes LO201 through...Ch. 20 - Prob. 20.10BYPCh. 20 - Prob. 20.11BYPCh. 20 - Prob. 20.12BYPCh. 20 - Prob. 1CCTC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Problem 11-11 (Algo) Error correction; change in depreciation method [LO11-2, 11-6, 11-7] Collins Corporation purchased office equipment at the beginning of 2022 and capitalized a cost of $2,130,000. This cost figure included the following expenditures: Purchase price Freight charges Installation charges Annual maintenance charge Total The company estimated an eight-year useful life for the equipment. No residual value is anticipated. The double-declining-balance method was used to determine depreciation expense for 2022 and 2023. In 2024, after the 2023 financial statements were issued, the company decided to switch to the straight-line depreciation method for this equipment. At that time, the company's controller discovered that the original cost of the equipment incorrectly included one year of annual maintenance charges for the equipment. Required: 1. Ignoring income taxes, prepare the appropriate correcting entry for the equipment capitalization error discovered in 2024. 2.…arrow_forwardBrief Exercise 11-15 (Algo) Change in principle; change in depreciation method [LO11-6] At the beginning of 2022, Robotics Incorporated acquired a manufacturing facility for $131 million $10.1 million of the purchase price was allocated to the building. Depreciation for 2022 and 2023 was calculated using the straight-line method, a 20-year useful life, and a $2.1 million residual value. In 2024, the company switched to the double-declining-balance depreciation method What is depreciation on the building for 2024? Note: Do not round intermediate calculations. Enter your answer in whole dollars rounded to the nearest whole number. Depreciationarrow_forwardFilll the blanks XYZ company purchased a new machine on July 1, 2021, at a cost of €50,000. The company estimated that the machine will have a residual value of €10,000. The machine is expected to be used for 10,000 working hours during its 5‐year life. After 6 months, it has been used for 2500 hours and company decides to sell it for 55000. No depreciation has been recorded for the machine. The blank on disposal is .....blank.... and the journal entry would require a debit entry of .....blank.... to depreciation expense.arrow_forward
- Change in Estimate Assume that Bloomer Company purchased a new machine on January 1, 2016, for $80,000. The machine has an estimated useful life of nine years and a residual value of $8,000. Bloomer has chosen to use the straight-line method of depreciation. On January 1, 2018, Bloomer discovered that the machine would not be useful beyond December 31, 2021, and estimated its value at that time to be $2,000. Required Calculate the depreciation expense, accumulated depreciation, and book value of the asset for each year 2016 to 2021. Was the depreciation recorded wrong in 2016 and 2017? If so, why was it not corrected?arrow_forwardQ-5 Cactus Inc. purchased a machine on January 1, 2022, at a cost of $60,000. The machine is expected to have an estimated residual value of $5,000 at the end of its five-year useful life. The company capitalized the machine and depreciated it in 2022 using the double-declining-balance method of depreciation. The company has a policy of using the straight-line method to depreciate equipment, as this method best reflects the benefits to the company over the life of its machinery. However, the company accountant neglected to follow company policy when he used the double-declining-balance method. Net income for the year ended December 31, 2022, was $53,000 as a result of depreciating the machine incorrectly. Cactus has not closed its books for 2022 yet. Cactus uses IFRS to prepare its financial statements. Required Using the method of depreciation that the company normally follows, prepare the correcting entry and determine the corrected net income. Assume the books of account have not…arrow_forwardView Policies Current Attempt in Progress The cost of equipment purchased by Swifty, Inc., on June 1, 2025, is $100,800. It is estimated that the machine will have a $8,400 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 46,200, and its total production is estimated at 660,000 units. During 2025, the machine was operated 6,240 hours and produced 57,200 units. During 2026, the machine was operated 5,720 hours and produced 49,900 units. Compute depreciation expense on the machine for the year ending December 31, 2025, and the year ending December 31, 2026, using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to O decimal places, e.g. 45,892.) b. d. Straight-line Units-of-output Working hours Sum-of-the-years'-digits e. Double-declining-balance eTextbook and Media Save for Later $ $ $ $ $ Search 2025 $ $ $ -о-со CO 2026 Attempts: 0 of 3 used D Submit…arrow_forward
- FIN 6020 v20f Taylor Toy Corp Ch 11 (11-9) Taylor Toy Corp. is considering the replacement of it injection molding machine. It is 2 years old but new technology has it considering the newest model. The old (current) machine was acquired 2 years ago and is being depreciated on a straight line basis over 8 years (6 years remaining).The annual depreciation expense is $350 per year, and its current book value is $2,100. It can be sold for $2,500 today. If the machine is not replaced, it is expected to be sold for $500 at the end of its remaining life (6 yrs). The new, replacement machine will cost $8,000. It is expected to be used for 6 years, and is expected to be sold for $800 then. It will be depreciated using MACRS (5-year class with 2 year convention). The new machine is expected to support an increase in sales by $1,000 per year, and with its improved electrical efficiency, it should reduce operating expenses by $1,500 per year. Inventories will need to increase by $2,000 and Account…arrow_forwardFill the blanks XYZ company purchased a new machine on July 1, 2021, at a cost of €50,000. The company estimated that the machine will have a residual value of €10,000. The machine is expected to be used for 10,000 working hours during its 5‐year life. After 6 months, it has been used for 2500 hours and company decides to sell it for 55000. No depreciation has been recorded for the machine. If the company used double declining balance method instead of units-of-activity, the net book value would have been ...blank... and the ...blank... on disposal would have been ...blank...arrow_forwardPlease reject this question E10-6 Kelm Company purchased a new machineon October 1,2008, at a cost of $120.000. the Company estimatedthat the machine will have a salvage value of $12,000. The machine k pected to be used for 10,000 working hours duringíts 5-year life. Instructions Compute the depreciation expense under the following methods for the year indicated. (a) Straight-Ime for 2008. (b) Upils-of-activity for 2008, assuming machine usage was 1,700 hours (c) Đeclining-balance using double the straight-line rate for 2008 and 2009.arrow_forward
- Q.4 Swanson & Hiller, Inc., purchased a new machine on September 1, 2008 at a cost of $108,000. The machine’s estimated useful life at the time of the purchase was five years, and its residual value was $8,000. Instructions a. Prepare a complete depreciation schedule, beginning with calendar year 2008, under each of the methods listed below (assume that the half-year convention is used): 1. Straight-line. 2. 200 percent declining-balance. 3. 150 percent declining-balance, switching to straight-line when that maximizes the expense.arrow_forwardQuestion 19 HoneyBunny, Inc. purchased a machine on 1/1/2016 for $300,000. At the time of the purchase, th estimated that the machine would last 6 years and have a salvage value of $90,000. They begin depreciating the machine using the straight-line depreciation method. On 1/1/2019, they change their estimated salvage value to $50,000 and extend the useful life of the machine by 2 years. What amount of depreciation expense will HoneyBunny report (at year-end) in 2019 related to this machine?arrow_forwardS10-6 Calculating depreciation by three methods–second year At the beginning of 2017, JetQuick Airlines purchased a used Boeing jet at a cost of $46 million. JetQuick expects the plane to remain useful for eight years (5 million kilometres) and to have a residual value of $6 million. JetQuick expects the plane to be flown for 1.3 million kilometres the first year and 1 million kilometres the second year. Requirements 1 Calculate second-year (2018) depreciation on the plane using the following methods: a straight line b units of production c reducing balance (use 2 x the SL rate). 2 Calculate the balance in Accumulated depreciation at the end of the second year using the straight-line method of depreciation.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
College Accounting, Chapters 1-27 (New in Account...AccountingISBN:9781305666160Author:James A. Heintz, Robert W. ParryPublisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
College Accounting, Chapters 1-27 (New in Account...
Accounting
ISBN:9781305666160
Author:James A. Heintz, Robert W. Parry
Publisher:Cengage Learning
Depreciation -MACRS; Author: Ronald Moy, Ph.D., CFA, CFP;https://www.youtube.com/watch?v=jsf7NCnkAmk;License: Standard Youtube License