Exercise 11-15 (Algo) Double-declining-balance method; switch to straight line [LO11-2, 11-6] On January 2, 2021, the Jackson Company purchased equipment to be used in its manufacturing process. The equipment has an estimated life of eight years and an estimated residual value of $40,375. The expenditures made to acquire the asset were as follows: Purchase price Freight charges Installation charges Jackson's policy is to use the double-declining-balance (DDB) method of depreciation in the early years of the equipment's life and then switch to straight line halfway through the equipment's life. Required: 1. Calculate depreciation for each year of the asset's eight-year life. 2. Are changes in depreciation methods accounted for retrospectively or prospectively? Complete this question by entering your answers in the tabs below. Required 1 Required 2 $187,000 4,400 7,000 Calculate depreciation for each year of the asset's eight-year life. Depreciation for the Period Year 2021 2022 2023 2024 2025 2026 2027 2028 Total Beginning of Period Book Value Depreciation Rate % % % % Annual Depreciation End of Period Accumulated Depreciation Book Value

Exercise 11-15 (Algo) Double-declining-balance method; switch to straight line [LO11-2, 11-6] On January 2, 2021, the Jackson Company purchased equipment to be used in its manufacturing process. The equipment has an estimated life of eight years and an estimated residual value of $40,375. The expenditures made to acquire the asset were as follows: Purchase price Freight charges Installation charges Jackson's policy is to use the double-declining-balance (DDB) method of depreciation in the early years of the equipment's life and then switch to straight line halfway through the equipment's life. Required: 1. Calculate depreciation for each year of the asset's eight-year life. 2. Are changes in depreciation methods accounted for retrospectively or prospectively? Complete this question by entering your answers in the tabs below. Required 1 Required 2 $187,000 4,400 7,000 Calculate depreciation for each year of the asset's eight-year life. Depreciation for the Period Year 2021 2022 2023 2024 2025 2026 2027 2028 Total Beginning of Period Book Value Depreciation Rate % % % % Annual Depreciation End of Period Accumulated Depreciation Book Value

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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Required information Exercise 11-3 (Algo) Depreciation methods partial periods [LO11-2] [The following information applies to the questions displayed below.] On October 1, 2021, the Allegheny Corporation purchased equipment for $148,000. The estimated service life of the equipment is 10 years and the estimated residual value is $5,000. The equipment is expected to produce 260,000 units during its life. Required: Calculate depreciation for 2021 and 2022 using each of the following methods. Partial-year depreciation is calculated based on the number of months the asset is in service. Exercise 11-3 (Algo) Part 3 3. Units of production (units produced in 2021, 13,000; units produced in 2022, 28,000). (Round "Depreciation per unit rate" answers to 2 decimal places.) Select formula for Units of Production Depreciation: Calculate 2021 depreciation expense: Depreciation per unit rate Units produced in 2021 Depreciation in 2021 Calculate 2022 depreciation expense: Depreciation per unit rate…
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Virtual Co. incurred research and development costs in 2023 as follows: Materials used in research and development projects $ 450,000 Equipment acquired that will have alternate future uses in future research and development projects 3,000,000 Depreciation for 2023 on above equipment 300,000 Personnel costs of persons involved in research and development projects 750,000 Consulting fees paid to outsiders for research and development projects 300,000 Indirect costs reasonably allocable to research and development projects 225,000 Total $5,025,000 Assume economic viability has not been achieved. What amount of research and development costs should be charged to Virtual’s 2023 income statement
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XYZ bought an equipment on January 1, 2014 at a cost of $2,200,000 including an estimated residual value of $200,000 and twenty (20) years estimated useful life. The fair value of the equipment on December 31, 2016 is $2,000,000, and revised residual value of $300,000. If there is a need to gross up, round off percentage to whole number and to nearest dollar. Required: 1. Revaluation surplus to be recognized on the year of revaluation 2. Carrying amount of the equipment on December 31, 2017
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At the end of 2022, GM did not have any PP&E. On Jan 1, 2023, GM purchased the following assets. Details for setting up depreciation schedules are summarized below: Cost Assets Acquisition Residual Method Useful life Truck 1/1/2023 Warehouse 1/1/2023 Multiple Choice O $1,000,000 $400,000 Factory 1/1/2023 3,000,000 700,000 Machinery 1/1/2023 2,000,000 500,000 Unit-of production Machinery's estimated total production capacity is 50,000 units of cars. During 2023, GM produced a total of 10,000 units using the Machinery, On Dec 31, 2023, sudden changes in the operational and market conditions indicate that the sum of undiscounted future cash flows from the factory is now estimated at $1,800,000. The fair value of the Factory as of the date is $1,500,000. After recognizing depreciation expense for 2023 as scheduled, GM wrote-off the factory. The remaining service life is reduced to additional 5 years and the residual value is updated to $150,000. Depreciation for the factory using these new…
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