On January 1, 20x1, Wheel Co. purchased a machine for P2,000,000 and established an annual straight-line depreciation rate of 10% with no residual value. During 20x5 Wheel determined that the machine will not be economically useful in its production process after December 31, 20x5. Wheel estimated that the machine had no residual value at December

On January 1, 20x1, Wheel Co. purchased a machine for P2,000,000 and established an annual straight-line depreciation rate of 10% with no residual value. During 20x5 Wheel determined that the machine will not be economically useful in its production process after December 31, 20x5. Wheel estimated that the machine had no residual value at December

Name: On January 1, 20x1, Wheel Co. purchased a machine forP2,000,000 and e
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: On January 1, 20x1, Wheel Co. purchased a machine forP2,000,000 and established an annual straight-line depreciationrate of 10% with no residual value. During 20x5 Wheeldetermined that the machine will not be economically usefulin its production pro

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 1 January 2009, SmartQuick Limited acquired a plant at a cost price of N$2.4 million. On the date of purchase, the useful life of the plant was estimated at eight years from the date of use, with a residual value of N$110 000. The plant was immediately ready for use as intended by management. Production only started on 15 May 2009. The plant was depreciated on a straight-line basis over its useful life.An impairment indicator review was performed at the end of the 2012, and a possible impairment was identified. Management expects that the plant will generate a net cashflow of N$145 000 per annum (before tax) during the remaining useful life of the asset. At the end of the useful life, the plant will be sold for N$110 000. Assume all cashflows occur at the end of each year. An appropriate after tax discount rate is 7.5%.On 27 December 2012, a new environmental law was inacted by parliament that limits the remaining useful life of the plant to four years. An independent sworn…
Alayna Ltd bought a machine on 1 January 20X2 for $70,000. The useful life of this machine was assessed as 10 years and it was depreciated on a straight-line basis. On 31 December 20X3 the machine was revalued to a fair value of $80,000 with no change to its remaining useful life. On 31 December 20X6 the machine was identified as impaired and revalued to $20,000. Alayna does not make a transfer between the revaluation surplus and retained earnings each year as a result of the revaluation. Required: According to HKAS 36 ‘Impairment of Assets’ what amount will be included in the statement of profit or loss of Alayna for the year ended 31 December 20X6 in respect of this impairment loss? A. $nil B. $6,000 C. $30,000 D. $24,000
This question is based on the following information: Trinity Company bought a copying machine costing P 123,000 with an estimated life of 3 years with negligible salvage value. The estimated earnings after taxes of this machine at the end of each year are estimated below: Earnings after taxes End of year 1 P 8,120 2 7,200 3 6,820 The company is using the straight line method for computing the depreciation. What is the accounting rate of return on the average cost of investment? a. 10.5% b. 11.5% c. 12% d. 15%
11. Angstrom Corporation purchased a truck at a cost of $60,000. It has an estimated useful life of five years and estimated residual value of $5,000. At the beginning of year three, Angstrom's managers concluded that the total usefu life would be four years, rather than five. There was no change in the estimated residual value. What is the amount of depreciation that Angstrom should record for year 3 under the straight-line method? A. $8,250 B. $11,000 C. $15,500 D. $16,500
ABC Corp uses the double declining balance method to depreciate a machine purchased on Jan 1, 20X1 for P20,000. Estimated scrap value is P2,000 and estimated useful life is 4 years. What is the asset's carrying value at December 31, 20X3?
On January 2, 2011, Jansing Corporation acquired a new machine with an estimated useful life of five years. The cost of the equipment was $40,000 with a residual value of $5,000. Prepare a complete depreciation table under the two depreciation methods listed below. Straight-line. 200 percent declining-balance. 150 percent declining-balance with a switch to straight-line when it will maximize depreciation expense.
DEPLORABLE BAD Co. acquired a machine on October 5, 20x1 for a total cost of ₱160,000. The machine was estimated to have a useful life of 4 years and a salvage value of ₱10,000. DEPLORABLE BAD Co. uses the sum-of-the-years' digits method and prorates full-year depreciation to the nearest month. DEPLORABLE BAD Co. sold the machine on December 27, 20x2 for ₱40,000. How much is the gain (loss) on the sale?
On January 1, year 1, Bray Company purchased for P 240,000 a machine with a useful life of ten years and no salvage value. The machine was depreciated by the double-declining balance method and the carrying amount of the machine was P 153,600 on December 31, year 2. Bray changed to the straight-line method on January 1, year 3. Bray can justify the change. What should be the depreciation expense on this machine for the year ended December 31, year 3?a. 15,360b. 19,200c. 30,720d. 24,000
vvv Limited purchased a machine for $300,000 cash on 1 July 2005. The useful life of the machine is 10 years, no residual value and straight line method for depreciation. The company uses the revaluation model. On 31 December 2005, the fair value was $332,500 for the machine. On 31 December 2006, the fair value was $280,500 for the machine. The machine has a fair value of $302,250 on 31 December 2007 and $250,950 on 31 December 2008. Required: Provide the journal entries related to machine.
On July 1, 2015 , Smile Corporation purchased a machine at a cost of P300,000. This machine was estimated to have a useful life of 5-years with no salvage value and was depreciated using the straight-line method. On January 2, 2018. Youth determined that this machine could no longer work efficiently, that its value had been permanently impaired, and that P90,000 could be recovered over the remaining useful life of the machine. In its December 31, 2016 statement of financial position, how much should Smile report as carrying value of the machine?
A Kubota tractor acquired on January 8 at a cost of $54,000 has an estimated useful life of 10 years. Assuming that it will have no residual value. a. Determine the depreciation for each of the first two years by the straight-line method. First Year Second Year $ b. Determine the depreciation for each of the first two years by the double-declining-balance method. Do not round the double-declining balance rate. If required, round your final answers to the nearest dollar. First Year Second Year
Light Company bought a machine for ₱300,000 on January 1, 20x8. The machine's useful life is 10 years and it is estimated to have a zero residual value and is depreciated using the straight-line method. The revalued amount of the machine is as follows: December 31 Fair values of the machine 20x8 ₱ 360,000 what is the amount of revaluation surplus transferred to retained earnings during 20x9