On July 1, 2019, Nuuty Inc., a calendar-year company, purchased a machine for a cash price of P800,000, with an estimated useful life of 10 years and estimated residual value of P70,000. The company uses double declining balance method. It is the company’s policy to depreciate its assets to the nearest month. During 2021, P131,500 was spent on an upgrade to the machine in order to improve its efficiency and increase the inflow of economic benefits over the machine’s remaining life. In addition, management decided to change to the straight-line method of depreciation, maintaining its residual value of P70,000. What is the revised depreciation expense for the year ended December 31, 2021?
On July 1, 2019, Nuuty Inc., a calendar-year company, purchased a machine for a cash price of P800,000, with an estimated useful life of 10 years and estimated residual value of P70,000. The company uses double declining balance method. It is the company’s policy to depreciate its assets to the nearest month. During 2021, P131,500 was spent on an upgrade to the machine in order to improve its efficiency and increase the inflow of economic benefits over the machine’s remaining life. In addition, management decided to change to the straight-line method of depreciation, maintaining its residual value of P70,000. What is the revised depreciation expense for the year ended December 31, 2021?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On July 1, 2019, Nuuty Inc., a calendar-year company, purchased a machine for a cash price of P800,000, with an estimated useful life of 10 years and estimated residual value of P70,000. The company uses double declining balance method. It is the company’s policy to
During 2021, P131,500 was spent on an upgrade to the machine in order to improve its efficiency and increase the inflow of economic benefits over the machine’s remaining life. In addition, management decided to change to the straight-line method of depreciation, maintaining its residual value of P70,000.
What is the revised depreciation expense for the year ended December 31, 2021?
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