is computed using the straight line method. i useful life of the equipment is five years with alue.
is computed using the straight line method. i useful life of the equipment is five years with alue.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 11E: On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated...
Related questions
Question
ANSWER NUMBER 4 ONLY. THANK YOU
![Easy Company acquired an equipment on January 1, 2021
for P5,000,000.
C Sa 0g ith CamScanner
Depreciation is computed using the straight line method
The estimated useful life of the equipment is five years with
no residual value.
A specific price index applicable to the equipment was 150
on January 1, 2021 and 225 on December 31, 2021.
1. What amount of depreciation should be reported in the
historical cost income statement for 2021?
а. 1,000,000
b. 1,500,000
c. 1,125,000
d. 1,250,000
2. What amount of depreciation should be reported in the
current cost income statement for 2021?
а. 1,500,000
b. 1,250,000
с. 1,000,000
d. 2,500,000
3. What amount should be reported as realized holding
gain on the equipment for 2021?
500,000
b. 250,000
300,000
а.
с.
d.
4. What amount should be reported as unrealized holding
gain on the equipment for 2021?
а. 1,250,000
b. 2,500,000
C. 2,000,000
CScamecoyith CamScanner](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff4a7bf35-0e91-42a8-9fff-ef6779a97326%2Fcea7a95f-8771-40d6-b9a0-46912a954c61%2Fvi2gaaq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Easy Company acquired an equipment on January 1, 2021
for P5,000,000.
C Sa 0g ith CamScanner
Depreciation is computed using the straight line method
The estimated useful life of the equipment is five years with
no residual value.
A specific price index applicable to the equipment was 150
on January 1, 2021 and 225 on December 31, 2021.
1. What amount of depreciation should be reported in the
historical cost income statement for 2021?
а. 1,000,000
b. 1,500,000
c. 1,125,000
d. 1,250,000
2. What amount of depreciation should be reported in the
current cost income statement for 2021?
а. 1,500,000
b. 1,250,000
с. 1,000,000
d. 2,500,000
3. What amount should be reported as realized holding
gain on the equipment for 2021?
500,000
b. 250,000
300,000
а.
с.
d.
4. What amount should be reported as unrealized holding
gain on the equipment for 2021?
а. 1,250,000
b. 2,500,000
C. 2,000,000
CScamecoyith CamScanner
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
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.Recommended textbooks for you
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning