On January 1, 2020, London Company purchased a largeOn the date of purchase, the management estimated thatDuring January 2021, the entity realized that technologicalProblem 8-11 (IAA)quantity of personal computers. The cost of these computershave a residual value at that time of P600,000. The entitythe computers would last approximately four years and wouHOn January 1, 2020, London Company purchasedquantity ofwas P6,000,000.On the date of purchase, the management estimatedused the double declining balance method.advancements had made the computers virtually obsoletand that they would have to be replaced.The management changed the remaining useful life of thecomputers to two years.What amount should be recorded as depreciation for 2021?a. 3,000,000b. 2,400,000c. 1,500,000d. 1,200,000

Depreciation rate as per double declining method 100/ useful life * 2 100/4 * 2 50% Carrying amount…

On January 1, 2020, London Company purchased a large have a residual value at that time of P600,000. The entit On the date of purchase, the management estimated tha the computers would last approximately four years and woul During January 2021, the entity realized that technologica quantity of personal computers. The cost of these computers Problem 8-11 (IAA) On January 1, 2020, London Company purchased was P6,000,000. On the date of purchase, the management estimated the computers would last approximately four years and a have a residual value at that time of P600,000. Thel used the double declining balance method. advancements had made the computers virtually obsolet and that they would have to be replaced. The management changed the remaining useful life of th- computers to two years. What amount should be recorded as depreciation for 2021 a. 3,000,000 b. 2,400,000 c. 1,500,000 d. 1.200,000

On January 1, 2020, London Company purchased a large have a residual value at that time of P600,000. The entit On the date of purchase, the management estimated tha the computers would last approximately four years and woul During January 2021, the entity realized that technologica quantity of personal computers. The cost of these computers Problem 8-11 (IAA) On January 1, 2020, London Company purchased was P6,000,000. On the date of purchase, the management estimated the computers would last approximately four years and a have a residual value at that time of P600,000. Thel used the double declining balance method. advancements had made the computers virtually obsolet and that they would have to be replaced. The management changed the remaining useful life of th- computers to two years. What amount should be recorded as depreciation for 2021 a. 3,000,000 b. 2,400,000 c. 1,500,000 d. 1.200,000

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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Question

On January 1, 2020, London Company purchased a large
On the date of purchase, the management estimated that
During January 2021, the entity realized that technological
Problem 8-11 (IAA)
quantity of personal computers. The cost of these computers
have a residual value at that time of P600,000. The entity
the computers would last approximately four years and wouH
On January 1, 2020, London Company purchased
quantity of
was P6,000,000.
On the date of purchase, the management estimated
used the double declining balance method.
advancements had made the computers virtually obsolet
and that they would have to be replaced.
The management changed the remaining useful life of the
computers to two years.
What amount should be recorded as depreciation for 2021?
a. 3,000,000
b. 2,400,000
c. 1,500,000
d. 1,200,000

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