Brioche Incorporated is a private company that uses IFRS for financial reporting. The company acquired equipment for $107,000 on 1 January 20X1. At acquisition, Brioche estimated the equipment would have a useful life of 10 years. The residual value was estimated at $7,700. Brioche Incorporated recorded depreciation on the equipment for 4 years using straight-line depreciation. During this period, the equipment had been used with less intensity than anticipated due to unforeseen cash flow which allowed for the purchase of additional equipment which was used to share the load. At the 20X5 reporting date, before recording the annual adjusting entry for depreciation expense, Brioche re-evaluated the estimates concerning this equipment and determined that the original useful life should have been estimated at 12 years and that the residual value is actually $9,800.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Topic Video
Question
Brioche Incorporated is a private company that uses IFRS for financial reporting. The company acquired equipment for $107,000 on 1
January 20X1. At acquisition, Brioche estimated the equipment would have a useful life of 10 years. The residual value was estimated
at $7,700. Brioche Incorporated recorded depreciation on the equipment for 4 years using straight-line depreciation. During this
period, the equipment had been used with less intensity than anticipated due to unforeseen cash flow which allowed for the purchase
of additional equipment which was used to share the load. At the 20x5 reporting date, before recording the annual adjusting entry for
depreciation expense, Brioche re-evaluated the estimates concerning this equipment and determined that the original useful life
should have been estimated at 12 years and that the residual value is actually $9,800.
Required:
1. This part of the question is not part of your Connect assignment.
2. Whether any adjustment is needed for 20X1 to 20X4 for the incorrect depreciation recorded.
Yes
O No
3-a. Calculate annual depreciation expense for 20X5.
Annual depreciation expense
Show Transcribed Text
3-b. Provide the required entry for annual depreciation expense for 20X5.
View transaction list
Journal entry worksheet
<
1
Description
Note: Enter debits before credits.
Date
20X5
Record entry
General Journal
3
Clear entry
Debit
Credit
View general journal
Transcribed Image Text:Brioche Incorporated is a private company that uses IFRS for financial reporting. The company acquired equipment for $107,000 on 1 January 20X1. At acquisition, Brioche estimated the equipment would have a useful life of 10 years. The residual value was estimated at $7,700. Brioche Incorporated recorded depreciation on the equipment for 4 years using straight-line depreciation. During this period, the equipment had been used with less intensity than anticipated due to unforeseen cash flow which allowed for the purchase of additional equipment which was used to share the load. At the 20x5 reporting date, before recording the annual adjusting entry for depreciation expense, Brioche re-evaluated the estimates concerning this equipment and determined that the original useful life should have been estimated at 12 years and that the residual value is actually $9,800. Required: 1. This part of the question is not part of your Connect assignment. 2. Whether any adjustment is needed for 20X1 to 20X4 for the incorrect depreciation recorded. Yes O No 3-a. Calculate annual depreciation expense for 20X5. Annual depreciation expense Show Transcribed Text 3-b. Provide the required entry for annual depreciation expense for 20X5. View transaction list Journal entry worksheet < 1 Description Note: Enter debits before credits. Date 20X5 Record entry General Journal 3 Clear entry Debit Credit View general journal
Expert Solution
steps

Step by step

Solved in 3 steps with 3 images

Blurred answer
Knowledge Booster
Depreciation Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education