Ariel Company purchased a boring machine on January 1, 2020 for P8,100,000. The useful life of the machine is estimated at three years with a residual value of P600,000. During the useful life, the expected units of production from the machine are 10,000 units for 2020, 9,000 units for 2021 and 6,000 units for 2022. What is the depreciation expense for 2021 using the most appropriate depreciation method?

Ariel Company purchased a boring machine on January 1, 2020 for P8,100,000. The useful life of the machine is estimated at three years with a residual value of P600,000. During the useful life, the expected units of production from the machine are 10,000 units for 2020, 9,000 units for 2021 and 6,000 units for 2022. What is the depreciation expense for 2021 using the most appropriate depreciation method?

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

Beats Corporation constructed a machine at a total cost of $206 million. Construction was completed at the end of 2020 and the machine was placed in service at the beginning of 2021. The machine was being depreciated over a 10-year life using the sum - of-the- yearsdigits method. By that method, accumulated depreciation at the end of 2023 is $972 milion. The residual value is expected to be $8.0 million. At the beginning of 2024, Beats decided to change to the straight-line method. Ignoring income taxes, what will be Beats's depreciation expense for 2024? Do not round intermedlate calculations. $14.4 million $27.2 million $5.4 million $16.2 million
Meca Concrete purchased a mixer on January 1, 2022, at a cost of $45,000. Straight-line depreciation for 2022 and 2023 was based on an estimated eight-year life and $3,000 estimated residual value. In 2024, Meca revised its estimate and now believes the mixer will have a total service life of only six years, and that the residual value will be only $2,000. Required:Compute depreciation for 2024 and 2025.
Lux Inc. recently purchased some production equipment that they would take possession as of February 1, 2021. The total purchase price for the equipment is $175,000 and they expect the residual value to be $25,000. The equipment is expected to have an estimated useful life of 5 years. Lux Inc. has a fiscal year end of December 31st. Required - a. What is the production equipment's depreciation expense for the year ending December 3, 2021, if they apply: i. straight-line method? ii) declining balance method for 2021 and 2022 assuming a 20% rate? b. On January 1, 2023, the company decided to make improvements to the production equipment and believe the total its estimated life will now be a total of 8 years and the residual value be $15,000. What is the depreciation expense for the year ending December 31, 2023, assuming the company uses the straight-line method? Assume that the 2021 and 2022 depreciation expenses were recorded correctly. c. On January 1, 2025 Lux Inc. sold the…
Healthlabs Ltd. purchased lab equipment for $16,500 on January 1, 2020. At that time, management determined that the equipment would have a useful life of three years with no residual value and that the straight-line depreciation method would be used. On January 1, 2021, management revised its initial estimate and determined that the company would be able to use the lab equipment for a total of five years. Determine the depreciation expense for 2021. Depreciation expense for 2021 2$ eTextbook and Media Save for Later
Getaway Inc. bought a machine on January 1, 2021 for $50,000. Getaway plans to keep the machine for 10 years. What is the machine's carrying value on June 30, 2023 assuming Gateway uses straight-line depreciation?
how much is the depreciation expense for 2024 using SYD depreciation method?
PIKACHU purchased an equipment for P540,000 on January 1, 2020. The equipment has an estimated salvage value of P60,000 and estimated useful life of 5 years. The equipment is being depreciated using the sum-of-years digit method. How much is the carrying value of the equipment on December 31, 2021?
On January 1, 2020, the ROSAS Company bought a machinery costing P1,000,000. The useful life is expected to be 10 years. On July 1, 2025, the machine's engine was replaced at a total cost of P320,000. This replacement will extend the useful life of the asset by an additional 5.5 years from the date of replacement. The old engine of the machine had a cost of 250,000. The loss on replacement is
Grouper Corp. purchased machinery for $492,000 on May 1, 2020. It is estimated that it will have a useful life of 10 years, a residual value of $12,000, production of 192,000 units, and 30,000 working hours. The machinery will have a physical life of 15 years and a salvage value of $3,000. In 2021, Grouper Corp. used the machinery for 2,250 hours and the machinery produced 27,000 units. Grouper prepares financial statements in accordance with IFRS. From the information given, calculate the depreciation charge for 2021 under each of the following methods, assuming Grouper has a December 31 year-end. calculate the CCA for 2024 when the CCA rate is 20%, assuming machinery is eligible for the accelerated investment incentive