0. c. (1,400,000) d. (400,000) ,0000 (1,000,000) uity a portion 17. On January 1, 20x1, Pizzicato Co. acquired a machine for P20,000,000. Pizzicato Co. estimated a useful life of 10 vears and a residual value of P1,000,000 and used the straight line method of depreciation. In 20x4, Pizzicato Co. changed the depreciation method to the sum-of-the-years' digits method, and the estimates of useful life and residual value to a remaining 5-year useful life and P800,000, respectively. On July 21, 20x6, Pizzicato Co. sold the machine for P4,500,000. Pizzicato Co. incurred selling costs of P50,000. Pizzicato Co. prorates full-year depreciation on the basis of the nearest month. How much is the gain (loss) on the sale? much are the e revaluation 937,667 933,333 is currenty 00, effective years. The -line bass d. (175,000) c. 175,000 b. (162,237) a. 162,237

0. c. (1,400,000) d. (400,000) ,0000 (1,000,000) uity a portion 17. On January 1, 20x1, Pizzicato Co. acquired a machine for P20,000,000. Pizzicato Co. estimated a useful life of 10 vears and a residual value of P1,000,000 and used the straight line method of depreciation. In 20x4, Pizzicato Co. changed the depreciation method to the sum-of-the-years' digits method, and the estimates of useful life and residual value to a remaining 5-year useful life and P800,000, respectively. On July 21, 20x6, Pizzicato Co. sold the machine for P4,500,000. Pizzicato Co. incurred selling costs of P50,000. Pizzicato Co. prorates full-year depreciation on the basis of the nearest month. How much is the gain (loss) on the sale? much are the e revaluation 937,667 933,333 is currenty 00, effective years. The -line bass d. (175,000) c. 175,000 b. (162,237) a. 162,237

Name: 17. On January 1, 20x1, Pizzicato Co. acquired a machine foruity a po
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Description: 17. On January 1, 20x1, Pizzicato Co. acquired a machine foruity a portionc. (1,400,000)d. (400,000)b.,000,00(1,000,000)17 On January 1, 20x1, Pizzicato Co. acquired a machine forP20.000,000. Pizzicato Co. estimated a useful life of 10 vearsand a re

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

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.

Topic Video

Question

17. On January 1, 20x1, Pizzicato Co. acquired a machine for
uity a portion
c. (1,400,000)
d. (400,000)
b.
,000,00
(1,000,000)
17 On January 1, 20x1, Pizzicato Co. acquired a machine for
P20.000,000. Pizzicato Co. estimated a useful life of 10 vears
and a residual value of P1,000,000 and used the straight line
much are the
e revaluation
method of depreciation. In 20x4, Pizzicato Co. changed the
depreciation method to the sum-of-the-years' digits method,
and the estimates of useful life and residual value to a
ation
937,667
remaining 5-year useful life and P800,000, respectively. On
July 21, 20x6, Pizzicato Co. sold the machine for P4,500,000.
Pizzicato Co. incurred selling costs of P50,000. Pizzicato Co.
933,333
is currently
00, effecie
month. How much is the gain (loss) on the sale?
b. (162,237)
prorates full-year depreciation on the basis of the nearest
years, The
t-line bass
c. 175,000 d. (175,000)
a. 162,237

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