A21-8 Change in Estimated Useful Life (LO 21-1, 21-6, 21-8)Stacey Corp. has been depreciating equipment over a 10-year life on a straight-line basis. The equipment, which cost $28,600, waspurchased on 1 January 20X1. It has an estimated residual value of $7,600. On the basis of experience since acquisition, managementhas decided in 20X5 to depreciate it over a total life of 14 years instead of 10 years, with no change in the estimated residual value.The change is to be effective on 1 January 20X5. The 20X5 financial statements are prepared on a comparative basis; 20X4 and 20X5incomes before depreciation were $54,100 and $56,400, respectively. Disregard income tax considerations.Required:1-a. Analyze the effects of the change. (Amounts to be deducted should be indicated by a minus sign.)Analysis:CostAccumulated depreciation to dateResidual valueTo be depreciatedAnnual depreciation (SL):Per yearS20X10S20X50

Name: A21-8 Change in Estimated Useful Life (LO 21-1, 21-6, 21-8)Stacey Cor
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: A21-8 Change in Estimated Useful Life (LO 21-1, 21-6, 21-8)Stacey Corp. has been depreciating equipment over a 10-year life on a straight-line basis. The equipment, which cost $28,600, waspurchased on 1 January 20X1. It has an estimated residual val

Assets Management -A procedure used by businesses and organizations to keep an eye on and manage…

Business

Accounting

acey Corp. has been depreciating equipment over a 10-year life on a straight-line basis. The equipment, which cost $28 rchased on 1 January 20X1. It has an estimated residual value of $7,600. On the basis of experience since acquisition, m s decided in 20X5 to depreciate it over a total life of 14 years instead of 10 years, with no change in the estimated resid e change is to be effective on 1 January 20X5. The 20X5 financial statements are prepared on a comparative basis; 20 comes before depreciation were $54,100 and $56,400, respectively. Disregard income tax considerations. quired: Analyze the effects of the change. (Amounts to be deducted should be indicated by a minus sign.) malysis: ost ccumulated depreciation to date esidual value 20X1 20X5

acey Corp. has been depreciating equipment over a 10-year life on a straight-line basis. The equipment, which cost $28 rchased on 1 January 20X1. It has an estimated residual value of $7,600. On the basis of experience since acquisition, m s decided in 20X5 to depreciate it over a total life of 14 years instead of 10 years, with no change in the estimated resid e change is to be effective on 1 January 20X5. The 20X5 financial statements are prepared on a comparative basis; 20 comes before depreciation were $54,100 and $56,400, respectively. Disregard income tax considerations. quired: Analyze the effects of the change. (Amounts to be deducted should be indicated by a minus sign.) malysis: ost ccumulated depreciation to date esidual value 20X1 20X5

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

The Bandor Group sold one of its plant assets on June 1 of the current year for $70,000. The asset had an original cost of $300,900 and an estimated residual value of $9,000. The firm used the straight-line method of depreciation assuming an estimated useful life of 7 years. The asset was in service for 5 years as of January 1 of the current year. Read the requirements Requirement a. Prepare the journal entry required to record the depreciation for the current year. (Record debits first, then credits. Exclude explanations from any journal entries) Account Depreciation Expense-Plant Asset Accumulated Depreciation-Plant Asset June 1 Requirement b. Prepare the journal entry required to record the sale of the asset. (Record debits first, then credits Exclude explanations from any journal entries.) Account June 1 Cash Accumulated Depreciation Plant Asset Loss on Sale of Plant Assets
Smith Company is an IFRS reporter. After 3 full years of use, the Smith Company revalues equipment with a carrying value of $970,000 to its fair value of $1,190,000 using the accumulated depreciation elimination method. The original cost of the equipment is $1,390,000 and the equipment has a useful life of 10 years with no scrap value. Smith depreciates under the straight-line method. What is the new carrying value of the asset? Group of answer choices $970,000 $1,390,000 $1,110,000 $1,190,000
A company purchased a piece of equipment for $120,000 and estimated that the asset will have no salvage value t the end of its 15-year useful life. At the end of Year 5 of ownership, when accumulated depreciation was $40,000 and the asset's book value was $80,000, the company revised the asset's estimated useful life to a total of 10 years. What is the appropriate accounting treatment beginning with Year 6? O The equipment will depreciate $40,000 over the next 10 years. O The equipment will depreciate $80,000 over the next 10 years. O The equipment will depreciate $40,000 over the next five years. O The equipment will depreciate $80,000 over the next five years.
Delso Company purchased the following on January 1, 20x1: • Office equipment at a cost of $54,000 with an estimated useful life to the company of three years and a residual value of $16,200. The company uses the double-declining-balance method of depreciation for the equipment. • Factory equipment at an invoice price of $741,000 plus shipping costs of $36,000. The equipment has an estimated useful life of 105,000 hours and no residual value. The company uses the units-of-production method of depreciation for the equipment. • A patent at a cost of $252,000 with an estimated useful life of 12 years. The company uses the straight-line method of amortization for intangible assets with no residual value. The company's year ends on December 31. Required: 1-a. Prepare a partial depreciation schedule of office equipment for 20x1, 20x2, and 20x3. 1-b. Prepare a partial depreciation schedule of factory equipment. The company used the equipment for 8,600 hours in 20x1, 9,800 hours in 20x2, and…
On January 1, 2011, ECLAR Co. acquired a building for ₱4,000,000. The asset is depreciated using the straight line method over an estimated useful life of 10 years.  On January 1, 2016, the building was estimated to have a recoverable amount of ₱1,600,000. Consequently, impairment loss was recognized on that date. There was no change in the estimated useful life.  On January 1, 2019, the building was estimated to have a new recoverable amount of ₱2,400,000 and a remaining useful life of 3 years. The building is measured under the revaluation model. How much of the impairment reversal is recognized in profit or loss?
On January 1, 2020, Cullumber Corp. acquired a machine at a cost of $1020000. It is to be depreciated on the straight-line method over a 5-year period with no residual value. Because of a bookkeeping error, no depreciation was recognized in Cullumber's 2020 financial statements. The oversight was discovered during the preparation of Cullumber's 2021 financial statements. Depreciation expense on this machine for 2021 should be $255000. $204000. $408000. $0.
Williams Company acquired machinery on July 1, Year 1, at a cost of $130,000. The estimated useful life of the machinery was 10 years and the estimated residual value was $10,000. Williams uses the double-declining-balance method of depreciation. On October 1, Year 4, Williams sold the equipment for $75,000. a. Record the journal entry for the depreciation on this machinery for Year 4. If an amount box does not require an entry, leave it blank . b. Record the journal entry for the sale of the machinery. If an amount box does not require an entry, leave it blank. If required, round amounts to the nearest dollar.
Use this information to answer the following 12 questions: Jefferson Company acquired equipment on January 2, Year 1, at a cost of $10 million. The equipment has a five-year life, no residual value, and is depreciated on a straight-line basis. On January 2, Year 3, Jefferson Company determines the fair value of the asset (net of any accumulated depreciation) to be $12 million. Determine the impact the equipment has on Jefferson Company's income in Year 1 using IFRS, assuming the revaluation method is used for measurement subsequent to initial recognition.
On January 1, 20X1, Bixby Inc. purchased equipment costing $75,000. The equipment is estimated to have a residual value of $6,000 and a four-year useful life. If the asset had been placed into service on May 1, 20X1 instead of January 1, 20X1, what would be the depreciation expense recorded for the year ending 12/31/X1, assuming the straight-line method is used? Round to the nearest whole dollar.
On January 1, 2016 Murgatroyd Co. purchased equipment for OMR 30,000, estimating a four-year useful life and no residual value. In 2016 and 2017, Murgatroyd depreciated the asset using the sum-of-years'-digits method. In 2018, Murgatroyd changed to straight-line depreciation for this equipment. What depreciation would Murgatroyd record for the year 2018 on this equipment? Select one: A. 9,000 B. 6,500 C. 12,000 D. 4,500
A company acquired machinery with cost of P2,200,000. with an estimated useful life of 10 years and estimated salvage value of P200,000 on January 1, 2018. The machinery has a recoverable amount (fair value) of P2,990,000 with an estimated residual value of P200,000 on January 1, 2019. On January 1, 2021, based on objective evidence, the asset was found to have been impaired. The machinery now has a recoverable amount (fair value) of P939,500 with an estimated value of P40,000. QUESTION: Based on the above data, answer the following: Assuming the company is using revaluation model. Answer the questions: How much is the depreciation in 2018? How much is the revaluation surplus on January 1, 2019? How much is the depreciation in 2019?
Williams Company acquired machinery on July 1, Year 1, at a cost of $130,000. The estimated useful life of the machinery was 10 years, and the estimated residual value was $10,000. Williams uses the double-declining-balance method of depreciation. On October 1, Year 4, Williams sold the equipment for $75,000. a. Journalize the entry for the depreciation on this machinery for Year 1. If an amount box does not require an entry, leave it blank. fill in the blank 4f086b01efdcfa8_2 fill in the blank 4f086b01efdcfa8_3 fill in the blank 4f086b01efdcfa8_5 fill in the blank 4f086b01efdcfa8_6 b. Journalize the entry for the sale of the machinery. If an amount box does not require an entry, leave it blank. If required, round amounts to the nearest dollar. fill in the blank 0ea5a0ff7fd802d_2 fill in the blank 0ea5a0ff7fd802d_3 fill in the blank 0ea5a0ff7fd802d_5 fill in the blank 0ea5a0ff7fd802d_6 fill in the blank 0ea5a0ff7fd802d_8 fill in…