6. During 2020, Mannix Company determined that machinery being depreciated by the straight-line method over a 10-year life had a total estimated life of only 7 years. The machinery was acquired on 1/1/18 at a cost of $400,000; it was expected to have a residual of $50,000 (which is unchanged). If the 7-year life had been used, accumulated depreciation would have been $100,000 at 12/31/19 instead of $70,000. Ignoring income taxes, what should be reported in Mannix's income statement for the year ended 12/31/20 as the depreciation expense for 2020 and what adjustment will be made to the beginning balance of retained earnings as reported for 1/1/20? a. $21,000 and $0. b. $56,000 and $0. c. $35,000 and $30,000. d. $56,000 and $30,000.

6. During 2020, Mannix Company determined that machinery being depreciated by the straight-line method over a 10-year life had a total estimated life of only 7 years. The machinery was acquired on 1/1/18 at a cost of $400,000; it was expected to have a residual of $50,000 (which is unchanged). If the 7-year life had been used, accumulated depreciation would have been $100,000 at 12/31/19 instead of $70,000. Ignoring income taxes, what should be reported in Mannix's income statement for the year ended 12/31/20 as the depreciation expense for 2020 and what adjustment will be made to the beginning balance of retained earnings as reported for 1/1/20? a. $21,000 and $0. b. $56,000 and $0. c. $35,000 and $30,000. d. $56,000 and $30,000.

Name: 6. During 2020, Mannix Company determined that machinery being deprec
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: 6. During 2020, Mannix Company determined that machinery being depreciated by the straight-linemethod over a 10-year life had a total estimated life of only 7 years. The machinery was acquired on1/1/18 at a cost of $400,000; it was expected to have

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

sa
Best Buy Company Limited (Best Buy) bought a machine for $400,000 on 1 July 2019. The machine had an estimated residual value of $50,000, and had estimated useful life of 10 years, or had an estimated operation output of 50,000 hours. The financial year-end date of Best Buy is 31 December. Required: (a) Compute the depreciation on this machine in the years of 2019 and 2020 using the following methods. (i) Straight-line (with depreciation calculated to the nearest whole month) (ii) 200%-declining-balance (with half-year convention) (iii) Units-of-output method (hours of operation:2,500 in 2019; 5,000 in 2020) 2019 (i)$________ (ii)$________ (iii)$________ 2020 (i)$________ (ii)$________ (iii)$________ (b) Which of the method(s) in part (a) would result in the highest net profit in the year of 2019?Briefly explain.
Annual depreciation expense on a building purchased a few years ago (using the straight-line method) is $4,800. The cost of the building was $96,000. The current book value of the equipment (January 1, 2021) is $81,600. At the time of purchase, the asset was estimated to have a zero salvage value. On January 1, 2021, the company decided to reduce the original useful life by 25% and to establish a salvage value of $4,800. The firm also decided double-declining-balance depreciation was more appropriate. Ignore tax effects. 1. Prepare the journal entry, if any, to report the accounting change under GAAP. 2. Record the annual depreciation for 2021.
Hansaben
On January 1, 2018, KingKong Corp. purchased an equipment with an estimated useful life of 8 years. The equipment was expected to have a residual value of P2,000 at the end of its useful life. The sum-of-the-years digits method was used in computing depreciation. For the year ended December 31, 2021, the depreciation applicable to this equipment was P4,200.What was the acquisition cost of the equipment?
Alteran Corporation purchased office equipment for $1.2 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 $600,000. 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.
Oman Cables Co. Purchased a machine for OR45,000 on January 1, 2020. The machine is expected to have a four - year life, with a residual value of OR5,000 at the end of four years. Using the sum - of - the years' - digits method, depreciation for 2021 would be Select one: a. 16,000 b. 12,000 C. 13,500 O d. none of the above is correct
Oklahoma Company purchased a machine on January 1, 2020. The machine had a cost of $520,000 with a $20,000 residual value. The estimated useful life of the machine was eight years. On January 1, 2022, due to technological innovations, the estimated useful life was reduced by two years from the original life and the residual value was reduced by 50%. The company uses straight-line depreciation. Required: Prepare the journal entry to record the annual depreciation on December 31, 2022. Show your calculations before you post the journal entry.
s
24. A building was acquired on January 1, 2020 at an original cost of P16,000,000, with zero residual value. Depreciation is computed using Double Declining Balance Method. Useful life in years is 20 years. On December 31, 2021, the building is appraised at a fair market value of P14,460,000.The appraisal results are to be recognized in the accounts considering the same remaining life for the building. How much is the amount to be credited to revaluation surplus at December 31, 2021?
ABC, Inc. purchased a crane on January 1, 2018, for P205,500. At the time of purchase, the crane was estimated to have a life of 6 years and a residual value of P13,500. In 2020, ABC Inc. determined that the crane had a total useful life of 7 years and a residual value of P9,000. If ABC Inc. uses the straight line method of depreciation, what will be the depreciation expense for the crane in 2020? * P32,000 P26,500 P18,928 P16,000
REPTILE COMPANY acquired a machine on January 1, 2018 for P5,250,000. It was to be depreciated using the straight-line method and no residual value was expected at the end of its useful life of 15 years. The fair value which was likewise the asset’s net recoverable amount were as follows: January 1, 2020. P4,975,000; January 1, 2022, P3,872,000; January 1, 2025, P2,600,000 Prepare all the necessary journal entries from 2018 – 2025 Depreciation expense 2018 – 2025 Impairment reported as a loss included in P&L 2020 – 2025