On January 1, 2019, Nobel Corporation acquired machinery at a cost of P600,000. Nobel adopted the straight-line method of depreciation for this machine and had been recording depreciation over an estimated life of ten years, with no residual value. At the beginning of 2022, a decision was made to change to the double-declining balance method of depreciation for this machine. The amount that Nobel should record as depreciation expense for 2012 is A P120,000. B P60,000. c) none of the above. P84,000.

On January 1, 2019, Nobel Corporation acquired machinery at a cost of P600,000. Nobel adopted the straight-line method of depreciation for this machine and had been recording depreciation over an estimated life of ten years, with no residual value. At the beginning of 2022, a decision was made to change to the double-declining balance method of depreciation for this machine. The amount that Nobel should record as depreciation expense for 2012 is A P120,000. B P60,000. c) none of the above. P84,000.

Name: On January 1, 2019, Nobel Corporation acquired machinery at a cost of
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: On January 1, 2019, Nobel Corporation acquired machinery at a cost of P600,000. Nobel adopted the straight-line methodof depreciation for this machine and had been recording depreciation over an estimated life of ten years, with no residualvalue. At

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

In March 2019, Dempo Org purchased production equipment valued at $640,000. In 2021, auditors discovered that half of the value of the equipment had been originally expensed in 2019. At the time of acquisition, the equipment was expected to last 8 years, with no salvage value. Dempo uses straight-line depreciation for this type of asset and follows a policy of recording a full year of depreciation in the year of acquisition. Dempo's tax rate is 28%. Required: Calculate the retrospective adjustment required and provide the appropriate journal entry to record this adjustment. Calculate the correct amount of depreciation for 2021 and provide the year-end entry.
On January 1, 2019, Ivanhoe Corporation acquired machinery at a cost of $1200000. Ivanhoe adopted the double-declining balance method of depreciation for this machinery and had been recording depreciation over an estimated useful life of ten years, with no residual value. At the beginning of 2022, a decision was made to change to the straight-line method of depreciation for the machinery. The depreciation expense for 2022 would be $61440. $87771. $120000. $171429.
Howarth Manufacturing Company purchased equipment on June 30, 2017, at a cost of $155,000. The residual value of the equipment was estimated to be $14,000 at the end of a five-year life. The equipment was sold on March 31, 2021, for $48,000. Howarth uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service. Required:1. Prepare the journal entry to record the sale.2. Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale.
s
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? $8,000
On January 1, 2017, NBM Corporation acquired machinery at a cost of ₱500,000. BMB adopted the double-declining balance method of depreciation for this machinery and had been recording depreciation over an estimated useful life of ten years, with no residual value. At the beginning of 2020, a decision was made to change to the straight-line method of depreciation for the machinery. The depreciation expense for 2020 would be ₱25,600 ₱50,000 ₱36,572 ₱71,428
Oriole Company purchased a machine on January 1, 2019, for $927000. At the date of acquisition, the machine had an estimated useful life of 6 years with no salvage. The machine is being depreciated on a straight-line basis. On January 1, 2022, Oriole determined, as a result of additional information, that the machine had an estimated useful life of 8 years from the date of acquisition with no salvage. An accounting change was made in 2022 to reflect this additional information.Assume that the direct effects of this change are limited to the effect on depreciation and the related tax provision, and that the income tax rate was 40% in 2019, 2020, 2021, and 2022. What should be reported in Oriole's income statement for the year ended December 31, 2022, as the cumulative effect on prior years of changing the estimated useful life of the machine? $463500 $61800 $0 $92700
Hadley Zavis Inc. started its unicycle manufacturing business in 2020 and acquired $600,000 of equipment at the beginning of 2020. It decided to use the double-declining balance (DDB) depreciation on its equipment with no residual value and a 10-year useful life. In 2022 it changed to the straight-line depreciation method. Depreciation computed for 2020-2021 is presented below: Year DDB 2020 $120,000 2021 96,000 In 2022, what would Harley Davis report for depreciation expense?
The Canliss Milling Company purchased machinery on January 2, 2019, for $800,000. A five-year life was estimated and no residual value was anticipated. Canliss decided to use the straight-line depreciation method and recorded $160,000 in depreciation in 2019 and 2020. Early in 2021, the company changed its depreciation method to the sum-of-the-years’-digits (SYD) method. Required:2. Prepare any 2021 journal entry related to the change. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Record the adjusting entry for depreciation in 2021.
On January 1, 2016, Cookie Inc. purchased an equipment for P1,970,000. On this date, the equipment has an estimated economic useful life of 12 years and estimated residual value of P98,000. It is the company’s policy to depreciate this type of equipment using a sum-of-years digit. On January 1, 2020, Cookie Inc. made a review of the estimated useful life and salvage value of the equipment and review revealed that the asset has a revised total life of 14 years and a residual value of P100,000. The company also changed the method of depreciation to straight-line. What is the carrying value of the asset of December 31, 2021?
Babcock Company purchased a piece of machinery for $40,500 on January 1, 2019, and has been depreciating the machine using the sum-of-the-years'-digits method based on a five-year estimated useful life and no salvage value. On January 1, 2021, Babcock decided to switch to the straight-line method of depreciation. The salvage value is still zero and the estimated useful life is changed to a total of six years from the date of purchase. Ignore income taxes. Required: 1. Prepare the appropriate journal entry, if any, to record the accounting change under GAAP. 2. Prepare the journal entry to record depreciation for 2021.
On January 1, 2019, Ivanhoe Corporation acquired equipment at a cost of $858000. Ivanhoe 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 2022, a decision was made to change to the straight-line method of depreciation for this equipment. The depreciation expense for 2022 would be $171600. $107250. $44688. $71500.