On January 2, 2017, Union Co. purchased a machine for P264,000 and depreciated it by the straight-line method using an estimated useful life of eight years with no salvage value. On January 2, 2020, Union determined that the machine had a useful life of six years from the date of acquisition and will have a salvage value of P24,000. An accounting change was made in 2020 to reflect the additional data. The accumulated depreciation for this machine should have a balance at December 31, 2020, of P146,000 O P154,000 O P176,000 O P160,000

On January 2, 2017, Union Co. purchased a machine for P264,000 and depreciated it by the straight-line method using an estimated useful life of eight years with no salvage value. On January 2, 2020, Union determined that the machine had a useful life of six years from the date of acquisition and will have a salvage value of P24,000. An accounting change was made in 2020 to reflect the additional data. The accumulated depreciation for this machine should have a balance at December 31, 2020, of P146,000 O P154,000 O P176,000 O P160,000

Name: On January 2, 2017, Union Co. purchased a machine for P264,000 and de
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: On January 2, 2017, Union Co. purchased a machine for P264,000 and depreciated it by thestraight-line method using an estimated useful life of eight years with no salvage value. OnJanuary 2, 2020, Union determined that the machine had a useful life

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

Nanki Corporation purchased equipment on January 1, 2014, for $616,000. In 2014 and 2015, Nanki depreciated the asset on a straight-line basis with an estimated useful life of eight years and a $12,000 residual value. In 2016, due to changes in technology, Nanki revised the useful life to a total of 5 years with no residual value. What depreciation would Nanki record for the year 2016 on this equipment? (Round your answer to the nearest dollar amount.) Multiple Choice $100,667. None of these answer choices are correct. $100,954. $155,000.
SEAT Inc. acquired the following assets in January of 2015. Equipment, estimated service life, 5 years; salvage value, $16,200 $503,700 Building, estimated service life, 30 years; no salvage value $648,000 The equipment has been depreciated using the sum-of-the-years’-digits method for the first 3 years for financial reporting purposes. In 2018, the company decided to change the method of computing depreciation to the straight-line method for the equipment, but no change was made in the estimated service life or salvage value. It was also decided to change the total estimated service life of the building from 30 years to 40 years, with no change in the estimated salvage value. The building is depreciated on the straight-line method. (a) Prepare the journal entry to record depreciation expense for the equipment in 2018. (b) Prepare the journal entry to record depreciation expense for the building in 2018.
Dog
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.
.Shine Corporation bought equipment on April 2, 2017 for P200,000. This equipment had an estimated useful life of 5 years and a salvage value of P20,000. Depreciation was computed using the sum of the years’ digits method. The equipment was sold for P120,000 on June 30, 2019. Prepare complete journal entries with supporting computation for the years 2017, 2018 and 2019.
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
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?
sa
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.
Howarth Manufacturing Company purchased equipment on June 30, 2017, at a cost of $800,000. The residual value of the equipment was estimated to be $50,000 at the end of a five-year life. The equipment was sold on March 31, 2021, for $170,000. 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. ces 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) General Journal No 1 Event 1 Cash Accumulated…
On January 1, 2017, Jace and Naya Corporation acquired equipment at a cost of ₱1,800,000. Jace and Naya adopted the sum-of- the-years’-digits method of depreciation for this equipment and had been recording depreciation over an estimated life of eight years, with no residual value. At the beginning of 2020, a decision was made to change to the straight-line method of depreciationfor this equipment. The depreciation expense for 2020 would bea. ₱150,000 c. ₱360,000b. ₱93,750 d. ₱225,000
On January 1, 2020, Cullumber Corp. acquired a machine at a cost of $1020000. It is to be depreciated on the straight-line method over a 5-year period with no residual value. Because of a bookkeeping error, no depreciation was recognized in Cullumber's 2020 financial statements. The oversight was discovered during the preparation of Cullumber's 2021 financial statements. Depreciation expense on this machine for 2021 should be $255000. $204000. $408000. $0.