On January 1, 2016, Landmark Company acquirfed equipment for P1,000,000 with an estimated 10-year useful life. The entity estimated a P100,000 residual value and used the straight line method of depreciation. During 2020, after the 2019 financial statements had been issued, the entity determined that, due to obsolescence, this equipment had a remaining useful life of only four more years and the residual value would be P40,000. On December 31, 2020, what is the carrying amount of the asset?

On January 1, 2016, Landmark Company acquirfed equipment for P1,000,000 with an estimated 10-year useful life. The entity estimated a P100,000 residual value and used the straight line method of depreciation. During 2020, after the 2019 financial statements had been issued, the entity determined that, due to obsolescence, this equipment had a remaining useful life of only four more years and the residual value would be P40,000. On December 31, 2020, what is the carrying amount of the asset?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

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 January 1, 2021, Slim Inc. purchased machinery for $350,000. The machinery had an estimated useful life of 10 years and a salvage value of $35,000. The company elected to use sum-of-years digits depreciation. At the beginning of 2025, Slim decided to switch to the straight-line method of depreciation and reassessed the remaining useful life of the machinery to be 4 years with no change in the salvage value. A change in depreciation methods together with a change in the useful life of the asset is Question 26Answer a. a change in accounting principle. b. an error correction. c. a change in accounting principle effected as a change in accounting estimate. d. a change in accounting estimate.
Blossom Enterprises purchased equipment on January 1, 2020, at a cost of €405,000. Blossom uses the straight-line depreciation method, a 5-year estimated useful life, and no residual value. At the end of 2020, independent appraisers determined that the assets have a fair value of €330,000. . Prepare the journal entry to record 2020 depreciation using the straight-line method. Account Titles and Explanation Debit Credit Depreciation Expense Accumulated Depreciation-Equipment (To record depreciation expense) please help me fill the table
On march 10, 2023, Sweet Acacia limited sold equipment that it bought for 286800 on August 20, 2026. It was originally estimated that the equipment would have a useful life of 12 years and a residual value of 24000 at the end of that time and depreciation has been calculated on that basis. The company uses the straight line method of depreciation and prepares its financial statement under IFRS. Calculate the depreciation charges on this equipment for 2016 and 2023, and the total charge for the period from 2017 to 2022, inclusive under each of the following six assumptions for partial periods. Depreciation is calculated for the exact period of time during which the asset is owned. Depreciation is calculated for the full year on January 1 balance in the asset account. Depreciation is calculated for the full year on December 31 balance in the asset account Depreciation for a half year is charged on plant assets that are acquired or disposed of during the year. Depreciation is…
Skysong Corp. purchased machinery on January 1, 2019 for $692,000. Straight-line depreciation is used. At the time management estimated that the machinery would be used over 10 years and would have a residual value of $47,000. It is now December 31, 2023 and management has determined that the machine's life is now a total of 12 years with no residual value. No adjusting journal entries have been recorded yet for the 2023 year-end.
Ivanhoe Ltd. purchased a piece of equipment on January 1, 2019, for $1,275,000. At that time, it was estimated that the mad would have a 15-year life and no residual value. On December 31, 2023, Ivanhoe's controller found that the entry for depreciation expense was omitted in error in 2020. In addition, Ivanhoe planned to switch to double-declining-balance depreciation beca change in the pattern of benefits received, starting with the year 2023. Ivanhoe currently uses the straight-line method for depreciating equipment. Ivanhoe Ltd. follows IFRS.
Vaughn Company changed depreciation methods in 2020 from double-declining-balance to straight-line. Depreciation prior to 2020 under double-declining balance was $82,300, whereas straight-line depreciation prior to 2020 would have been $45,800. Vaughn's depreciable assets had a cost of $252,700 with a $43,200 salavage value, and an 8-year useful life at the beginning of 2020. Prepare the 2020 journal entry related to Vaughn's depreciable assets (Equipment)
The Catherine Company, effective January 1, 2020, made the following accounting change: Catherine changed its depreciation method from double-declining-balance to the straight-line method on equipment purchased on January 1, 2018, at a cost of $400,000. The equipment had an estimated useful life of five years and a $30,000 residual value. Catherine is subject to an income tax rate of 30% and can justify the changes. Required:a. Calculate the 2020 depreciation expense.$fill in the blank 1 b. Calculate the the December 31, 2020, accumulated depreciation balance on the equipment.
On July 1, 2020, ABC Company sells equipment for $105,000. The equipment originally cost $300,000, had an estimated 5-year life and an expected residual value of $50,000. The accumulated depreciation account had a balance of $200,000 on January 1, 2020, using the straight-line method. The gain or loss on disposal is _________________. (Indicate whether gain or loss)
On 1 January 2019, ABC, Inc. decided to replace its existing machinery which it had acquired on 1 January 2016 for P40 million and initiated process for acquisition of new machinery. Simultaneously, it also initiated efforts to sell of the old machinery. The new machinery was commissioned on 30 March 2019. The company depreciates machinery assuming a zero residual value and 5-year total useful life. The carrying value of old machinery as at 1 January 2019 worked out to P16 million. If the fair value of the old machinery is P12 million and it would cost 10% of the sale proceeds to close the deal, find out when the company should classify the machinery as held-for-sale. 1.) What is the journal entry to record the reclassification? 2.) How much is the total depreciation expense to be recognized for 2019?
On January 1, 2022, Oriole Corporation acquired equipment at a cost of $759000. Oriole adopted the sum-of-the-years-digits method of depreciation for this equipment and had been recording depreciation over an estimated life of 8 years, with no residual value. At the beginning of 2025, a decision was made to change to the straight-line method of depreciation for this equipment. Depreciation expense for 2025 would be $63250. $151800. O $94875. O $39531.