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1. Reveille, Inc, purchased Machine #204 on April 2021, and placed the machine into production on April 3, 2021. The following infomation is relevant to Machine #204: Price P60,000 Freight-in costs 2.500 Preparation and installation costs 3,900 Labor costs during regular production operation 10.200 Credit terms 210, n/30 Total productive output 138,500 units The company expects that the machine could beusedfor 10 years, after which the salvage value would be zero. However, Reveille, Inc., intends to use the machine only eight years, after which it expects to be able to sell it for P9,800. The invoice for Machine #204 was paid April 10, 2021. The number of units produced in 2021 and 2022 were 23,200 and 29,000, respedtively. Reveile computes depreciation to the nearest whole month. Required Compute the depreciation for the years indicated, using the following methods (round your answer to the nearest peso): 1. 2021: Units of productions 2. 2022: Sum-of-the-years'- digits method

1. Reveille, Inc, purchased Machine #204 on April 2021, and placed the machine into production on April 3, 2021. The following infomation is relevant to Machine #204: Price P60,000 Freight-in costs 2.500 Preparation and installation costs 3,900 Labor costs during regular production operation 10.200 Credit terms 210, n/30 Total productive output 138,500 units The company expects that the machine could beusedfor 10 years, after which the salvage value would be zero. However, Reveille, Inc., intends to use the machine only eight years, after which it expects to be able to sell it for P9,800. The invoice for Machine #204 was paid April 10, 2021. The number of units produced in 2021 and 2022 were 23,200 and 29,000, respedtively. Reveile computes depreciation to the nearest whole month. Required Compute the depreciation for the years indicated, using the following methods (round your answer to the nearest peso): 1. 2021: Units of productions 2. 2022: Sum-of-the-years'- digits method

FINANCIAL ACCOUNTING
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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Property, Plant and Equipment (Part 2) Answer and Solution
Of Tasks Assessment Task 7.1 (Bazley et al., 2010) 1. Reveille, Inc., purchased Machine #204 on April 2021, and placed the machine into production on April 3, 2021. The following information is relevant to Machine #204: Price P60,000 Freight-in costs 2,500 Preparation and installation costs 3,900 Labor costs during regular production operation 10,200 Credit terms 2/10, n/30 Total productive output 138.500 units The company expects that the machine could beused for 10 years, after which the savage value would be zero. However, Reveille, Inc., intends to use the machine only eight years, after which it expects to be able to sell it for P9,800. The invoice for Machine #204 was paid April 10, 2021. The number of units produced in 2021 and 2022 were 23,200 and 29,000, respectively. Reveile computes depreciation to the nearest whole month. . Required Compute the depreciation for the years indicated, using the following methods (round your answer to the nearest peso): 1. 2021: Units of productions 2. 2022: Sum-of-the-years'- digits method 2. The Nickle Company purchased an as set for P17,000 on January 2, 2021. The asset has an expected residual value P1,000. The depreciation expense for 2021 and 2022 is shown next for three altemative depreciation methods: Year Method A Method B Method C 2021 P4,000 P6,400 P6,375 2022 4,000 4,800 3,984 Required 1. Which depreciation method is the company using in each example? 2. Compute the depreciation expense for 2023 and 2024 under each method 3. On January 1, 2021 the Emming Corpontion purchased some machinery. The machinery has an estimated life of 10 years and an estimated residual value of P5, 000. The depreciation on this machinery was P20,000 in 2023 . Required Compute the acquisition cost of the equipment under the following depreciation methods: 1. Straight-line 2. Sum-of-the-years'-digits 3. Double-declining-balance 4. The Loban Company purchased four cars for P 9,000 each, and expects that they would be sold in three years for P1,500 each. The company uses group depreciation on a straight- Ine basis. Required 1. Prepare joumal entries to record the acquisition and the first year's depreciation. 2. If one of the cars is sold at the beginning of the second year for P 7,000, what journal entry is required? 5. The Wilcox Company acquires four machines that have the following characteristics: Estimated Service Life 6 years Machine Cost Estimated Residual Value A P26,000 P2,000 B 19,000 1,000 9 30,000 5,000 5 D 28,000 Required 1. Prepare joumal entries to record the acquisition and the first year's depreciation, assuming that the composite method is used on a straight-ine basis. 2 If the company sells machine B after four years for P 10,000 prepare the journal entry.
Transcribed Image Text:Of Tasks Assessment Task 7.1 (Bazley et al., 2010) 1. Reveille, Inc., purchased Machine #204 on April 2021, and placed the machine into production on April 3, 2021. The following information is relevant to Machine #204: Price P60,000 Freight-in costs 2,500 Preparation and installation costs 3,900 Labor costs during regular production operation 10,200 Credit terms 2/10, n/30 Total productive output 138.500 units The company expects that the machine could beused for 10 years, after which the savage value would be zero. However, Reveille, Inc., intends to use the machine only eight years, after which it expects to be able to sell it for P9,800. The invoice for Machine #204 was paid April 10, 2021. The number of units produced in 2021 and 2022 were 23,200 and 29,000, respectively. Reveile computes depreciation to the nearest whole month. . Required Compute the depreciation for the years indicated, using the following methods (round your answer to the nearest peso): 1. 2021: Units of productions 2. 2022: Sum-of-the-years'- digits method 2. The Nickle Company purchased an as set for P17,000 on January 2, 2021. The asset has an expected residual value P1,000. The depreciation expense for 2021 and 2022 is shown next for three altemative depreciation methods: Year Method A Method B Method C 2021 P4,000 P6,400 P6,375 2022 4,000 4,800 3,984 Required 1. Which depreciation method is the company using in each example? 2. Compute the depreciation expense for 2023 and 2024 under each method 3. On January 1, 2021 the Emming Corpontion purchased some machinery. The machinery has an estimated life of 10 years and an estimated residual value of P5, 000. The depreciation on this machinery was P20,000 in 2023 . Required Compute the acquisition cost of the equipment under the following depreciation methods: 1. Straight-line 2. Sum-of-the-years'-digits 3. Double-declining-balance 4. The Loban Company purchased four cars for P 9,000 each, and expects that they would be sold in three years for P1,500 each. The company uses group depreciation on a straight- Ine basis. Required 1. Prepare joumal entries to record the acquisition and the first year's depreciation. 2. If one of the cars is sold at the beginning of the second year for P 7,000, what journal entry is required? 5. The Wilcox Company acquires four machines that have the following characteristics: Estimated Service Life 6 years Machine Cost Estimated Residual Value A P26,000 P2,000 B 19,000 1,000 9 30,000 5,000 5 D 28,000 Required 1. Prepare joumal entries to record the acquisition and the first year's depreciation, assuming that the composite method is used on a straight-ine basis. 2 If the company sells machine B after four years for P 10,000 prepare the journal entry.
O Tasks Assessment Task 7.1 (Bazley et al., 2010) 1. Reveille, Inc., purchased Machine #204 on April 2021, and placed the machine into production on April 3, 2021. The following information is relevant to Machine #204: Price P60,000 Freight-in costs 2,500 Preparation and installation costs 3,900 Labor costs during regular production operation 10,200 Credit terms 2/10, n/30 Total productive output 138,500 units The company expects that the machine could beused for 10 years, after which the savage value would be zero. However, Reveille, Inc., intends to use the machine only eight years, after which it expects to be able to sell it for P9,800. The invoice for Machine #204 was paid April 10, 2021. The number of units produced in 2021 and 2022 were 23,200 and 29,000, respectively. Reveile computes depreciation to the nearest whole month. . Required Compute the depreciation for the years indicated, using the following methods (round your answer to the nearest peso): 1. 2021: Units of productions 2. 2022: Sum-of-the-years'- digits method 2. The Nickle Company purchased an as set for P17,000 on January 2, 2021. The asset has an expected residual value P1,000. The depreciation expense for 2021 and 2022 is shown next for three altemative depreciation methods: Year Method A Method B Method C 2021 P4,000 P6,400 P6,375 2022 4,000 4,800 3,984 Required 1. Which depreciation method is the company using in each example? 2. Compute the depreciation expense for 2023 and 2024 under each method 3. On January 1, 2021 the Emming Corpoation purchased some machinery. The machinery has an estimated life of 10 years and an estimated residual value of P5, 000. The depreciation on this machinery was P20,000 in 2023. Required Compute the acquisition cost of the equipment under the following depreciation methods: 1. Straight-ine 2. Sum-of-the-years'-digits 3. Double-declining-balance 4. The Loban Company purchased four cars for P 9,000 each, and expects that they would be sold in three years for P1,500 each. The company uses group depreciation on a straight- Ine basis. Required 1. Prepare joumal entries to record the acquisition and the first year's depreciation. 2. If one of the cars is sold at the beginning of the second year for P 7,000, what journal entry is required? 5. The Wilcox Company acquires four machines that have the following characteristics: Estimated Service Life 6 years Machine Cost Estimated Residual Value A P26,000 P2,000 B 19,000 1,000 9 30,000 5,000 5 D 28,000 Required 1. Prepare joumal entries to record the acquisition and the first year's depreciation, assuming that the composite method is used on a straight-ine basis. 2 If the company sells machine B after four years for P 10,000 prepare the journal entry.
Transcribed Image Text:O Tasks Assessment Task 7.1 (Bazley et al., 2010) 1. Reveille, Inc., purchased Machine #204 on April 2021, and placed the machine into production on April 3, 2021. The following information is relevant to Machine #204: Price P60,000 Freight-in costs 2,500 Preparation and installation costs 3,900 Labor costs during regular production operation 10,200 Credit terms 2/10, n/30 Total productive output 138,500 units The company expects that the machine could beused for 10 years, after which the savage value would be zero. However, Reveille, Inc., intends to use the machine only eight years, after which it expects to be able to sell it for P9,800. The invoice for Machine #204 was paid April 10, 2021. The number of units produced in 2021 and 2022 were 23,200 and 29,000, respectively. Reveile computes depreciation to the nearest whole month. . Required Compute the depreciation for the years indicated, using the following methods (round your answer to the nearest peso): 1. 2021: Units of productions 2. 2022: Sum-of-the-years'- digits method 2. The Nickle Company purchased an as set for P17,000 on January 2, 2021. The asset has an expected residual value P1,000. The depreciation expense for 2021 and 2022 is shown next for three altemative depreciation methods: Year Method A Method B Method C 2021 P4,000 P6,400 P6,375 2022 4,000 4,800 3,984 Required 1. Which depreciation method is the company using in each example? 2. Compute the depreciation expense for 2023 and 2024 under each method 3. On January 1, 2021 the Emming Corpoation purchased some machinery. The machinery has an estimated life of 10 years and an estimated residual value of P5, 000. The depreciation on this machinery was P20,000 in 2023. Required Compute the acquisition cost of the equipment under the following depreciation methods: 1. Straight-ine 2. Sum-of-the-years'-digits 3. Double-declining-balance 4. The Loban Company purchased four cars for P 9,000 each, and expects that they would be sold in three years for P1,500 each. The company uses group depreciation on a straight- Ine basis. Required 1. Prepare joumal entries to record the acquisition and the first year's depreciation. 2. If one of the cars is sold at the beginning of the second year for P 7,000, what journal entry is required? 5. The Wilcox Company acquires four machines that have the following characteristics: Estimated Service Life 6 years Machine Cost Estimated Residual Value A P26,000 P2,000 B 19,000 1,000 9 30,000 5,000 5 D 28,000 Required 1. Prepare joumal entries to record the acquisition and the first year's depreciation, assuming that the composite method is used on a straight-ine basis. 2 If the company sells machine B after four years for P 10,000 prepare the journal entry.
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