**Exercise: Depreciation Calculation Using Double Declining Balance Method****Problem Statement:**Exon Company purchased equipment for $120,000 on January 1, 2018. The equipment has an estimated residual value of $10,000 and an estimated useful life of 10 years. The company depreciates the equipment using the double declining balance method. On January 1, 2021, the company determines that the total useful life is 8 years and the estimated residual value is $3,000.**Required:**1. **Calculate the equipment's book value at January 1, 2021.** - Round your final answer to the nearest dollar.2. **Determine the annual depreciation expense for 2021.** - Round your final answer to the nearest dollar.*Note: The exercise does not include any graphs or diagrams.*

Given that, cost of the equipment = $120000 Residual value of equipment = $10000 Useful life of…

Answered: Exon Company purchased equipment for…

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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On January 1, 2019, Fur Company purchased a machinery at a cost of P goods 21,000,000 with an estimated useful life of 10 years and scrap value of P 1,000,000. The double declining balance method of depreciation is used by the entity. In January 2021, it is estimated that the useful life of the machinery from acquisition date should have been 7 years while the residual value should have been P 960,000. What is the depreciation expense for the year 2021? P 6,384,000 P 2,688,000 P 2,352,000 P 5,376,000
Waterway Company purchased a computer system for $86,700 on January 1, 2019. It was depreciated based on a 8-year life and an $16,700 salvage value. On January 1, 2021, Waterway revised these estimates to a total useful life of 4 years and a salvage value of $10,500. Waterway uses straight-line depreciation Prepare Waterway's entry to record 2021 depreciation expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit
Rayya Company purchases a machine for $151,200 on January 1, 2021. Straight-line depreciation is taken each year for four years assuming a seven-year life and no salvage value. The machine is sold on July 1, 2025, during its fifth year of service. Prepare entries to record the partial year’s depreciation on July 1, 2025, and to record the sale under each separate situation. (1) The machine is sold for $64,800 cash. (2) The machine is sold for $51,840 cash. 1. Record the depreciation expense as of July 1, 2025. 2. Record the sale of the machinery for $64,800 cash. 3. Record the machine sold for $51,840 cash. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Sta Elena Construction & Development Corporation purchased a construction crane on January 1, 2019 for P25,000,000. Depreciation is computed using the Straight Line method with a 20 year useful life and 10% residual value. On December 31, 2022, the entity determined that indicators of impairment exist for the asset. On this date, the entity estimated that the crane has a remaining useful life of 10 years, and that its residual value will be zero. It was also determined that the net cash inflows from the asset will total P2,000,000 per year, and that its fair value less cost to sell is P10,000,000. The appropriate discount rate is 8%. 3. How much is the impairment loss on December 31, 2022? a. 18,900,000 b. 7,079,837 c. 20,490,000 d. 11,579,837 4. How much is the depreciation expense in 2023? a. 1,157,984 b. 2,049,000 c. 1,890,000 d. 1,342,016
Spiral Company uses the sun-of-the years’ digits method to depreciate equipment purchased in January 2021 for P20,000. The estimated residual value of the equipment is P2,000 and the estimated useful life is 4 years. What should Spiral Company report as the asset’s carrying amount as of December 31, 2023? a. 1,800 b. 2,000 c. 4,500 d. 3,800
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A company purchased a piece of equipment for $30,000 on January 1, 2019. Management estimates salvage value of $3,000 and a useful life of five years. It uses the straight‐line method of depreciation. Where applicable, it applies the half‐year rule. On December 31, 2021 the equipment’s fair value is estimated to be $3,000. What is the impairment loss for 2021? $3,000 $5,400 $7,800 $10,800

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