Chapter 9: Fixed assets: Utilization & Impairment9.1 Manufacturing company, In May/N with the situation on the repair of fixed assets are as follows:Balance at the beginning of the month of the account 242 (detailed cost overhaul of fixed assets): 10.000.Following is situation related to repairing of fixed assets during the month1. Allocate the cost of repairs of fixed assets incurred last month: 2000 which is assigned to the cost ofselling department.2. Company had an production equipment fixed, amount payable to the fixing servicer is 10.000 (without10% VAT). Company also issued spare parts from warehouse replacing broken part of this equipment,2.000; Other expenses related to repairing activities are paid in cash on hand, 1.000. The repairingprocess is completed and its costs are expected to be allocated during 5 months from this month.3. Repaired fixed assets in Administration department. Overhaul costs incurred are:-Materials issued from warehouse: 20.000-Labor costs: 4.000-Spare parts (purchased directly from suppliers): price without tax is 26.000, VAT 10% paid bybank transfer.-Other expenses is 1,200 in cash.Repair work has been completed. Overhaul expenses is expected to cost allocation for 24 months startingfrom this month.4. Upgraded 1 fixed asset in the production department. Paid cash in bank to the supplier of theupgrading services, 120.000 (excluded VAT rate at 5%). Issuing spare parts to upgrade the fixed asset,40,000. At the end of the month, upgrading activities was completed and all cost fulfilled the requirementto be capitalized. This activities is sponsored by the investment and development fund.5. The total cost of regularly repairs of machinery at production department in the month, charged toexpenses in the month: Materials: 2.000; workers: 3.000, depreciation: 2.000 and other expenses in cash:1.500.Requirements: Established the accounting entries for transactions above?9.2 On September 16, 20X2, Company purchased machinery for 115.000.000 VND paid by cash in bank.The estimated service life of the machinery is 10 year and the estimated residual value is 5.000.000 VND.Required: a/Calculated depreciation of this machinery for September of 20X2 using straight-line method.b/Provided that new machinery is used for manufacturing; depreciation for other fixed assets formanufacturing (excluded the new machinery) is 40.000.000 VND. Prepare journal entries fordepreciation expense of manufacturing activities in September.

"As per the policy of our company, we are allowed to answer only the first three sub-parts in case…

Answered: 9.2 On September 16, 20X2, Company…

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

2- Depreciation is reserved according to the accelerated depreciation method for the machine with a cost value of 60.000 TL and a scrap value of 10.000 TL . What is the amount of depreciation calculated at the end of the 2nd year for the machine with an economic life of 5 years? a) 24,000 TL B) 20.000 TL NS) 10,000 TL D) 12.000 TL TO) 16.000 TL
Knife Edge Company purchased tool sharpening equipment on July 1, 20Y5, for $16,200. The equipment was expected to have a useful life of three years and a residual value of $900. Instructions: a. Determine the amount of depreciation expense for the years ended December 31, 20Y5, 20Y6, 20Y7 and 20Y8 by the straight-line method. Depreciation Expense 20Y5 $fill in the blank 1 20Y6 $fill in the blank 2 20Y7 $fill in the blank 3 20Y8 $fill in the blank 4 b. Determine the amount of depreciation expense for the years ended December 31, 20Y5, 20Y6, 20Y7 and 20Y8 by the double-declining-balance method. Round the double-declining-balance depreciation rate to six decimal places and round your final answers to the nearest whole dollar. Depreciation Expense 20Y5 $fill in the blank 5 20Y6 $fill in the blank 6 20Y7 $fill in the blank 7 20Y8 $fill in the blank 8
9. Compute for the depreciation in the first year using double declining method. a. 40,000 c. 72,000 b. 36,000 d. 80,000 10. How much is the book value of the equipment as of end of second year using output method of depreciation? a. 360,000 c. 301,500 b. 341,500 d. 230,000
None
Bruce Company acquired a machinery on April 1, 2020. Cost P 1,200,000 Residual Value P 120,000 Estimated Useful Life 8 years What is the depreciation for 2020 using sum of years’ digits? A. P240,000 B. P180,000 C. P120,000 D. P160,000 What is the depreciation for 2021 using sum of years’ digits? A. P157,500 B. P217,500 C. P210,000 D. P105,000
A. Br1,600 B. Br2,000 C. Br5.600 D. Br14,400 6. On July 1. 20X1, Clem Company purchased lactory equipment for br50,000, Residual value was estimated to be br2.000. The equipment will be depreciated over ten years using the sum-of- the-years'-digits depreciation method. Clem has a December 31 year-end, and during 20X1, one- half of a year's depreciation expense was recorded. How much depreciation expense should be recorded for 20X2? (round computations to the pearest dollar) A. Br7,855 do00 B. Br8,291 C. Br8,636 D, Br8,727 7. Which of the following expenditures incurred in connection with the acquisition of equipment is not a proper charge to the asset account? A) Freight or transportation costs. B) Cost of test runs to ready the machine for operation C) Taxes and tariffs D) Cost of vandalism E) B and D 8. If the Double-declining depreciations rate of a plant asset is 50%, then its estimated life will be: A. 50 years. B) 10 years C) 5 years D) 4 years E) None of the above Part II:…
2. A computer equipment was acquired at the beginning of the vear at a cost of $56,000 with an estimated residual value of $5,000, and an estimated useful life of 5 years. Determine the second year's depreciation expense using the straight-line method. a. $10,200 b. $22,400 c. $11,200 d. $12,200 ense 0.000 100 d horenoo
Comparison of Depreciation Methods P4. Italian Construction Company purchased a new crane for $360,500 at the begin- ning of year 1. The crane has an estimated residual value of $35,000 and an estimated useful life of six years. The crane is expected to last 10,000 hours. It was used 1,800 hours in year 1; 2,000 hours in year 2; 2,500 hours in year 3; 1,500 hours in year 4; 1,200 hours in year 5; and 1,000 hours in year 6. REQUIRED 1. Compute the annual depreciation and carrying value for the new crane for each of the six years under each of the following methods: (a) straight-line, (b) production, and (c) double-declining-balance (round percentage to two decimal places.) 2. If the crane is sold for $250,000 after year 3, what would be the amount of gain or loss under each method? 3. ACCOUNTING CONNECTION ▶ Do the three methods differ in their effect on the company's profitability? Do they differ in their effect on the company's operating cash flows? Explain.
On July 10, 20X8, your firm purchases for $126,000 a machine with an estimated useful life of 8 years and a salvage value of $6,000. Your firm uses SYD depreciation and depreciates assets purchased between the 1st and 15th of the month for the entire month and assets purchased after the 15th as though they were acquired the following month. What is 20X1 depreciation expense $13,333 $11,111 $26,667 $13,889
Straight line depreciation method Formula: Annual Depreciation Expense = (Cost of the Asset – Salvage Value) / Useful Life of the Asset Where: Cost of the asset is the purchase prtce of the asset Salvage value is the value of the asset at the end of its useful life Useful life of the asset represents the number of periods/ years in which the asset is expected to be used by the company Company A purchases a machine for $100,000 with an estimated salvage value of $20,000 and a useful life of 5 years. Solve using straight line depreciation method. Year Bool value ( beginning of yea) Depreciation Book Value (end of year)r 1 3 4 2.
MNVK Corp. purchased a computer system at a cost of $140,000 on January 1, 20X1. The estimated useful life is 10 years, and the estimated residual value is $10,000. Assuming MNVK uses the double-declining-balance method, what is the depreciation expense for 20X2? Select one: a. $22,800 b. $28,000 c. $26,000 d. $22,400 e. $20,800
Computer equipment was acquired at the beginning of the year at a cost of $66,178 that has an estimated residual value of $3,857 and an estimated useful life of 4 years. Determine the second-year depreciation using the straight-line method. Oa. $15,580.25 Ob. $31,160.50 Oc. $16,544.50 Od. $17,508.75

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS