Exercise 11-4 (Algo) Other depreciation methods [LO11-2][The following information applies to the questions displayed below.]On January 1, 2021, the Allegheny Corporation purchased equipment for $187,000. The estimated service life of theequipment is 10 years and the estimated residual value is $11,00O. The equipment is expected to produce 244,000 unitsduring its life.Required:Calculate depreciation for 2021 and 2022 using each of the following methods.Exercise 11-4 (Algo) Part 22. One hundred fifty percent declining balance. (Round final answers to the nearest whole dollar amount.)O Answer is complete but not entirely correct.DepreciationYearexpense202126,400 X202222,440 X Required InformationExercise 11-4 (Algo) Other depreciation methods [LO11-2][The following information applies to the questions displayed below.]On January 1, 2021, the Allegheny Corporation purchased equipment for $187,000. The estimated service life of theequipment is 10 years and the estimated residual value is $11,000. The equipment is expected to produce 244,000 unitsduring its life.Required:Calculate depreciation for 2021 and 2022 using each of the following methods.Exercise 11-4 (Algo) Part 33. Assume instead the equipment was purchased on October 1, 2021. Calculate depreciation for 2021 and 2022 using each of the twomethods. Partial-year depreciation is calculated based on the number of months the asset is in service. (Do not round intermediateanswers and round your answers to the nearest whole dollar amount.)* Answer is complete but not entirely correct.20212022Sum-of-the-years' digits2$26,400 X $22,440 XOne hundred fifty percent declining balance$32,000 X $28,800 X

On January 1, 2021, the Allegheny Corporation purchased equipment for $187,000. The estimated service life of the equipment is 10 years and the estimated residual value is $11,000. The equipment is expected to produce 244,000 units during its life. Required:

On January 1, 2021, the Allegheny Corporation purchased equipment for $187,000. The estimated service life of the equipment is 10 years and the estimated residual value is $11,000. The equipment is expected to produce 244,000 units during its life. Required:

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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Sum-of-the-year's-digits. Jon Seceda Furnace Corp. purchased machinery for $315,000 on May 1, 2020. It is estimated that it will have a useful life of 10 years, salvage value of $15,000, production of 240,000 units, and working hours of 25,000. During 2021, Seceda Corp. uses the machinery for 2,650 hours, and the machinery produces 25,500 units My understanding of the equation is (Cost-Salvage Value) x Depreciation Fraction = Depreciation Charge. My calculation: ($315,000-$15,000) x 10/55 = 54,545.45 Bartely's answer (which is correct): ($315,000-$15,000) x 10/55 x 4/12 = 18,181.81 ($315,000-$15,000) x 9/55 x 8/12 = 32,727.27 Sum-of-the-Years'-digits = 50,909.08 (add 18,181.81 and 32,727.27) My question is where does the fractions (4/12 and 8/12) come from?
On June 1, 2021, ABC Company purchased rights to a mine for P30,000,000, of which, P3,000,000 was allocable to the land. Estimated reserves were 2,250,000 tons. ABC expected to extract and sell 37,500 tons per month. ABC purchased mining equipment on September 30, 2021 for P12,000,000. The mining equipment had a useful life of nine years. However, after all the resource is removed, the equipment will be of no use and will be sold for P750,000. ANSWER THE QUESTION: What is the depletion for 2021?
A company is considering the purchase of a capital asset for $135,000. Installation charges needed to make the asset serviceable will total $25,000. The asset will be depreciated over six years using the straight-line method and an estimated salvage value (SV6) of $10,000. The asset will be kept in service for six years, after which it will be sold for $ 30,000. During its useful life, it is estimated that the asset will produce annual revenues of $40,000. Operating and maintenance (O&M) costs are estimated to be $8,000 in the first year. These O&M costs are projected to increase by $ 1,200 per year each year thereafter. The after-tax MARR is 12% and the effective tax rate is 40 % .C) The before - tax present worth of this asset is -$60,000. By how much would the annual revenues have to increase to make the purchase of this asset justifiable on a before - tax basis?
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Robin Limited(‘Robin’)purchased a piece of equipment and it was fully operational as at1 February 2019. The equipment was purchased for $320,000. In addition to the purchase price, Robinspent $40,000 to transport the equipment on site and $60,000 of engineering fees to set-up the equipment. It had an estimated useful life of 10 years and an estimated residual value of $60,000. Each year $6,000 is spent on repairs and maintenance. On 1 July 2021, $80,000 was spent on a major upgrade after which the equipment had an expected useful life of 5 years from the date of the upgrade with a revised residual value of $38,000. On 1 March 2023, the equipment was sold for $120,000 cash. Robin’s financial year end balance date is 30 June and Robinuses straight-line depreciation. Record the journal entries required for the disposal of the equipment as at 1 March 2023.
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In 2020, Tableta Company paid P4,000,000 to purchase a land containing a total estimated 160,000 tons of extractable mineral deposits. The estimated value of the property after the mineral has been removed is P800,000. On March 30, 2021, Tableta Company purchased mining equipment costing P1,500,000. The useful life of the equipment is 10 years. Extraction activities began in 2021 and by the end of the year, 20,000 tons had been recovered and sold. The depreciation expense pertaining to the mining equipment in 2021 amounted to?
Birkey Company purchased equipment on January 1, 2020, at a total cost of $99,000. The machinery’s estimated useful life is 8 years or 60,000 hours, and its residual value is $9,000. During 2020 and 2021, the machinery was used 7,000 and 8,00 hours, respectively. This information will be used for Parts 1, 2, and 3 of this problem. It will be repeated in each part. What is the book value on Dec. 31, 2021 after the second year's adjusting entry (straight-line)? Show your calculations Blank 1. Fill in the blank, read surrounding text. Book Value, Dec 31, 2021 Straight-Line Method Blank 2. Fill in the blank, read surrounding text.
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