DEPRECIATION1. On January 1, 2021, an entity purchased machinery for P4,500,000. The machinery has an estimateduseful life of four years with residual value of P500,000. Depreciation is computed by the sum of theyears' digits method. What amount should be reported as accumulated depreciation on December 31,2022?2. An entity purchased equipment on January 1, 2021 for P5,000,000. The equipment had a useful life of5 years and residual value of P600,000. The policy is to depreciate 5-year assets using the 200% doubledeclining method for the first 2 years and then switch to straight line. What amount should be reported asaccumulated depreciation on December 31, 2023?3. An entity takes a full year depreciation in the year of acquisition and no depreciation in the year ofdisposition. Data relating to a depreciable asset on December 31, 2020 are cost P5,500,000, residual valueP1,000,000, accumulated depreciation P3,600,000 and useful life 5 years. The asset was acquired on July1, 2018. Using the same depreciation method in 2018, 2019 and 2020, what amount of depreciationshould be recorded in 2021?4. On January 1, 2021, an entity acquired an equipment with an estimated useful life of 10 years andestimated residual value of P50,000. The depreciation applicable to this equipment was P240,000 for2023 computed under the sum of years' digits method. What was the acquisition cost of equipment?

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Description: DEPRECIATION1. On January 1, 2021, an entity purchased machinery for P4,500,000. The machinery has an estimateduseful life of four years with residual value of P500,000. Depreciation is computed by the sum of theyears' digits method. What amount sho

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DEPRECIATION 1. On January 1, 2021, an entity purchased machinery for P4,500,000. The machinery has an estimated useful life of four years with residual value of P500,000. Depreciation is computed by the sum of the years' digits method. What amount should be reported as accumulated depreciation on December 31, 2022?

DEPRECIATION 1. On January 1, 2021, an entity purchased machinery for P4,500,000. The machinery has an estimated useful life of four years with residual value of P500,000. Depreciation is computed by the sum of the years' digits method. What amount should be reported as accumulated depreciation on December 31, 2022?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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