On April 1, year 1, ABC. Ltd. purchased a piece of equipment for $ 440000 plusinstallation costs of $ 60000 that were necessary to make the equipmentoperational.ABC. Ltd. has a December 31, fiscal year end and uses the straightline depreciation method. The piece of equipment is expected to have a useful lifeof 10 years at which time it will have a residual value of $ 20000. What is thebook value of the equipment as of December 31, year 3. Round your answer to thenearest dollar.

The objective of the question is to calculate the book value of the equipment as of December 31,…

Answered: On April 1, year 1, ABC. Ltd. purchased…

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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SABM Co. acquired a machine on January 1, 2018, at a cost of P120,000. It was expected to have a useful economic life of 10 years. SABM Co. uses the straight-line method in depreciating its machinery and equipment and reports on a calendar year basis. On December 31, 2020, the machine was appraised as having a gross replacement cost of P150,000. SABM Co. applies the revaluation model in valuing this class of property, plant, and equipment after its initial recognition. What is the balance of the revaluation surplus account on December 31, 2021 assuming that piecemeal realization of revaluation surplus is in order? * P30,000 P21,000 P18,000 P15,000 answer not given
On January 1, 2018, KingKong Corp. purchased an equipment with an estimated useful life of 8 years. The equipment was expected to have a residual value of P2,000 at the end of its useful life. The sum-of-the-years digits method was used in computing depreciation. For the year ended December 31, 2021, the depreciation applicable to this equipment was P4,200.What was the acquisition cost of the equipment?
On May 22, 2020, Colossal Corporation purchased machinery for $80,000. The useful life of this machinery is estimated at 10 years, with a $10,000 residual value. (i). Assume that Colossal uses straight-line depreciation and the half-year convention. Depreciation expense on this machinery will be: Select one: O a. $4,000 in 2020 and $8,000 in 2021 O b. $3,500 in 2020 and $7,000 in 2021 O c. $8,000 in 2020 and $8,000 in 2021 d. $7,000 in 2020 and $7,000 in 2021
Blossom Corp. purchased equipment for $150000 on January 1, 2023. It is estimated that it has a useful life of 10 years, a residual value of $15200, and total production of 211000 units. During 2023, this machinery produced 23400 units. The Corporation has a December 31 year end. Using the units of production depreciation method, the 2023 depreciation expense will be O $13480 O $14949 O $26960 O $28680
On Jan. 1, 2021, Mother, Inc., whose financial year end is every Dec. 31, purchased a unit of equipment at a total cost of P10,000,000. The equipment is estimated to have a useful life of 5 years with a residual value equal to 10% of its cost. How much is the depreciation expense for 2021 using the straight line depreciation method?
On January 2, 2022, Sandhill Ltd. purchased equipment to be used in its manufacturing operations. The equipment has an estimated useful life of ten years, and an estimated residual value of $34000 It was also estimated that the equipment would be used a total of 71000 hours over its useful life. The depreciation expense for this equipment was $159040 for calendar 2023, using the units of production method. The machine was used for 8000 hours in 2023. The acquisition cost of the equipment was O $1713230. $1648490. $1143730. O $1445480.
ABC, Inc. purchased a crane on January 1, 2018, for P205,500. At the time of purchase, the crane was estimated to have a life of 6 years and a residual value of P13,500. In 2020, ABC Inc. determined that the crane had a total useful life of 7 years and a residual value of P9,000. If ABC Inc. uses the straight line method of depreciation, what will be the depreciation expense for the crane in 2020? * P32,000 P26,500 P18,928 P16,000

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