On January 2, 2018, Lapar Corporation purchased a machine for $50,000. Lapar paid shipping expenses of $500, as well as installation costs of $1,200. The company estimated that the machine would have a useful life of 10 years and a residual value of $3,000. On January 1, 2019, Lapar made additions costing $3,600 to the machine in order to comply with pollution-control ordinances. These additions neither prolonged the life of the machine nor increased the residual value. 1. If Lapar records depreciation expense under the straight-line method, how much is the depreciation expense for 2019? 2. Assume Lapar determines the machine has three significant components as shown below. Component Amount Service Life $25,000 15,000 11,700 Salvage Value $3,000 A B C 10 years 5 years 3 years If Lapar uses IFRS, what is the amount of depreciation expense that would be recorded? 0 10

On January 2, 2018, Lapar Corporation purchased a machine for $50,000. Lapar paid shipping expenses of $500, as well as installation costs of $1,200. The company estimated that the machine would have a useful life of 10 years and a residual value of $3,000. On January 1, 2019, Lapar made additions costing $3,600 to the machine in order to comply with pollution-control ordinances. These additions neither prolonged the life of the machine nor increased the residual value. 1. If Lapar records depreciation expense under the straight-line method, how much is the depreciation expense for 2019? 2. Assume Lapar determines the machine has three significant components as shown below. Component Amount Service Life $25,000 15,000 11,700 Salvage Value $3,000 A B C 10 years 5 years 3 years If Lapar uses IFRS, what is the amount of depreciation expense that would be recorded? 0 10

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Description: On January 2, 2018, Lapar Corporation purchased a machine for $50,000. Lapar paid shipping expenses of$500, as well as installation costs of $1,200. The company estimated that the machine would have a usefullife of 10 years and a residual value of $

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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