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On 1 Apr 2021 the company purchased a building and a truck for $122,000; a promissory note was signed. The appraisal values are: $96,000 for the building and $24,000 for the truck.
Additional information for adjustments
- To
depreciate the building purchased on 1 April 2021, the company uses the straight-line method over 20 years, with a residual value of $7,600. For the truck purchased on 1 April 2021, the company uses the units-of-production method. The company expects to use it for a total of 140,000 kilometers, with a residual value of $4,400. It was used for 2,800 kilometers in April.
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- Pier Exports purchased equipment on January 1, 2018, at a cost of $600,000. Thecompany estimates that there will be $60,000 salvage value and that the equipmentwill have a useful life of 8 years. The company elects to use the sum-of-the-years'digit method until 2021, at which time the company changes to the straight-linemethod of depreciation for the equipment. Required:1. The equipment's book value at January 1, 2021 is $ _________. Round your final answer to the nearest dollar.2. The annual depreciation expense for 2021 is $ _________. Round your final answer to the nearest dollar.On March 31, 2021, Company A purchased a manufacturing facility along with vehicles and other equipment. The distribution of the total purchase price of $1,500,000 to the various types of assets, along with the estimated useful lives and residual values is as follows: The purchase on March 31, 2021 included equipment at the purchase cost of $150,000. The company sold equipment for $120,000 on June 29, 2022. Company A uses the following depreciation methods: straight-line depreciation method for buildings and equipment double-declining-balance method for vehicles Company A calculates partial-year depreciation based on the number of months an asset is in service. Complete the tasks below. Use the Depreciation tab for your work and only fill out the yellow cells. Find depreciation expense on the building, equipment, and vehicles for 2021. Prepare the journal entries for 2022 to record (a) depreciation on the equipment sold on June 29, 2022, and (b) the sale of the equipment.…Cheadle Company purchased a fleet of 20 delivery trucks for $8,000 each on January 2, 2019. It decided to use composite depreciation on a straight-line basis and calculated the depreciation from the following schedule: 1. Prepare the journal entries necessary to record the preceding events. 2. Assume that the company expected all the trucks to last 4 years and be retired for $1,600 each. Using group depreciation, prepare journal entries for all 6 years, assuming the company retired the trucks as shown by the latter schedule.
- On January 1, 2021, Cake Company acquired a factory equipment at a cost of P450,000. The equipment is being depreciated using the straight-line method over its projected useful life of 10 years. On December 31, 2022, a determination was made that the asset's recoverable amount was only P288,000. On December 31, 2023, the assets recoverable amount was determined to be P333,000 and management believes that the impairment loss previously recognized should be reversed. What amount of impairment loss should be recognized on December 31, 2022?On Jan 1, 2021, ABC Company acquired a machinery at a cost of P250,000. It was estimated to have a useful life of 10 years and no residual value. The company uses the cost model to account for the machinery and the straight-line method is used in depreciating the machinery. On Dec 31, 2022, the company tested the machinery for possible impairment and determined that the recoverable value of the said machinery amounted to P150,000. On Dec 31, 2023, it was revealed that the recoverable value of the machinery had increased to P187,500. Q-29. 8.How much is the impairment loss reported in 2022? 9.What is the carrying amount of the machinery on Dec 31, 2023 before reversal of impairment? 10.What is the carrying amount of the machinery on Dec 31, 2023 on the basis that it was not impaired? 11.What amount of gain on reversal of impairment should be reported in profit or loss for 2023?On July 1, 2020, Concord Corporation purchased factory equipment for $28300O. Salvage value was estimated to be $7900. The equipment will be depreciated over five years using the double-declining balance method. Counting the year of acquisition as one-half year, Concord should record depreciation expense for 2021 on this equipment of O $58180. O $67920. O $90560. O $113200.
- Whispering Company owns equipment that cost $100,000 when purchased on January 1, 2019. It has been depreciated using the straight-line method based on an estimated salvage value of $10,000 and an estimated useful life of 5 years. Depreciation expense adjustments are recognized annually. Instructions: Prepare Whispering Company's journal entries to record the sale of the equipment in these four independent situations. Update depreciation on assets disposed of at time of sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) (a) (b) (c) (d) (e) (f) (a) Sold for $59,000 on January 1, 2022. Sold for $59,000 on April 1, 2022. SR. Account Titles and Explanation (b) Sold for $21,000 on January 1, 2022. Sold for $21,000 on September 1, 2022. Repeat (a), assuming Whispering uses double-declining…Winia Corporation purchased farm equipment on January 1, 2019, for $280,000. In 2019 and 2020, Winia depreciated the asset on a straight-line basis with an estimated useful life of five years and a $90,000 residual value. In 2021, due to changes in technology, Winia revised the residual value to $30,000 but still plans to use the equipment for the full five years. What depreciation would Winia record for the year 2021 on this equipment? $8,000Beemo Company purchased an equipment on January 1, 2018 for P150,000. The equipment is being depreciated using the straight-line method over its projected useful life of 10 years. on December 31, 2019, it was determined that the asset’s recoverable amount was only P96,000. Assume that this was properly computed and that recognition of the impairment was warranted. On December 31, 2020, the asset’s recoverable amount was determined to be P111,000 and management believes that the impairment loss previously recognized should be reversed. How much impairment loss should be recognized on December 31, 2019? What is the asset’s carrying amount on December 31, 2020? What would have been the asset’s carrying amount at December 31, 2020, had the impairment not been recognize in 2018? How much impairment recovery should be reported in 2020 income statement?
- Oriole Company owns equipment that cost $120,000 when purchased on January 2, 2024. It has been depreciated using the straight- line method based on estimated residual value of $6,000 and an estimated useful life of five years. Following are the four independent situations. Assume depreciation has been recorded to the date of sale. (a) Prepare Oriole Company's journal entry to record the sale of the equipment for $55,100 on January 2, 2027. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date Account Titles Jan. 2 Debit CreditCake, Inc. purchased a machinery on January 1, 2020, at a cost of P1,250,000. It is being depreciated using the straight-line method over its projected useful life of 8 years. On December 31, 2021, the asset's fair value was P1,125,000. Accordingly, an entry was made on that date to recognize the revaluation surplus. Revaluation is recorded maintaining the proportionate relationship between the asset account and accumulated depreciation. It is the company policy to transfer a portion of revaluation surplus to retained earnings every period. What is the amount of revaluation surplus reported in equity on December 31, 2022?*On August 3, Franko Construction purchased special - purpose equipment at a cost of $8, 900, 000. The useful life of the equipment was estimated to be eight years, with an estimated residual value of $20,000. Required: Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the straight - line depreciation method (half- year convention). Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the 200 percent declining - balance method (half-year convention) with a switch to straight line when it will maximize depreciation expense. Which of these two depreciation methods (straight line or double - declining - balance) results in the highest net income for financial reporting purposes during the first two years of the equipment's use?
