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On January 1, 2020, Layman Company purchased personal computers for P6,000,000. The management estimated that the computers would last approximately 4 years with residual value of P600,000. The entity used the double declining balance method. During January 2021, the management realized that technological advancement had made the computers virtually obsolete and proposed changing the remaining useful life to 2 years. What amount of depreciation should be recognized for 2021? a. 3,000,000 b. 2,400,000 c. 1,500,000 d. 1,200,000

On January 1, 2020, Layman Company purchased personal computers for P6,000,000. The management estimated that the computers would last approximately 4 years with residual value of P600,000. The entity used the double declining balance method. During January 2021, the management realized that technological advancement had made the computers virtually obsolete and proposed changing the remaining useful life to 2 years. What amount of depreciation should be recognized for 2021? a. 3,000,000 b. 2,400,000 c. 1,500,000 d. 1,200,000

FINANCIAL ACCOUNTING
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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Problem 27-20 (IAA) On January 1, 2020, Layman Company purchased personal computers for P6,000,000. The management estimated that the computers would last approximately 4 years with residual value of P600,000. The entity used the double declining balance method. During January 2021, the management realized that technological advancement had made the computers virtually obsolete and proposed changing the remaining useful life to 2 years. What amount of depreciation should be recognized for 2021? а. 3,000,000 b. 2,400,000 с. 1,500,000 d. 1,200,000
Transcribed Image Text:Problem 27-20 (IAA) On January 1, 2020, Layman Company purchased personal computers for P6,000,000. The management estimated that the computers would last approximately 4 years with residual value of P600,000. The entity used the double declining balance method. During January 2021, the management realized that technological advancement had made the computers virtually obsolete and proposed changing the remaining useful life to 2 years. What amount of depreciation should be recognized for 2021? а. 3,000,000 b. 2,400,000 с. 1,500,000 d. 1,200,000
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