On March 10, 2020, Pearl Limited sold equipment that it bought for $134,640 on August 21, 2013. It was originally estimated that theequipment would have a useful life of 12 years and a residual value of $12,000 at the end of that time, and depreciation has beencalculated on that basis. The company uses the straight-line method of depreciation and prepares its financial statements under IFRS.Your answer is partially correct.Calculate the depreciation charge on this equipment for 2013 and for 2020, and the total charge for the period from 2014 to2019, inclusive, under each of the following six assumptions for partial periods: (Round answers to O decimal places, e.g. 5,275.)1.Depreciation is calculated for the exact period of time during which the asset is owned. (Use 365 days for your base.)2.Depreciation is calculated for the full year on the January 1 balance in the asset account.3.Depreciation is calculated for the full year on the December 31 balance in the asset account.4.Depreciation for a half year is charged on plant assets that are acquired or disposed of during the year.Depreciation is calculated on additions from the beginning of the month following their acquisition and on disposals tothe beginning of the month following the disposal.5.6.Depreciation is calculated for a full period on all assets in use for over half a year, and no depreciation is charged onassets in use for less than half a year. (Use 365 days for your base.) isumptions20132014-20192020To1.2$6132061320102203.10220613204.51106132051105.34076132025556.61320%24%24%242.

Name: On March 10, 2020, Pearl Limited sold equipment that it bought for $1
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: On March 10, 2020, Pearl Limited sold equipment that it bought for $134,640 on August 21, 2013. It was originally estimated that theequipment would have a useful life of 12 years and a residual value of $12,000 at the end of that time, and depreciat

the question is based on the concept of Depreciation Accounting. As per the Bartleby guidelines we…

Business

Accounting

On March 10, 2020, Pearl Limited sold equipment that it bought for $134,640 on August 21, 2013. It was originally estimated that t equipment would have a useful life of 12 years and a residual value of $12,000 at the end of that time, and depreciation has been calculated on that basis. The company uses the straight-line method of depreciation and prepares its financial statements under IFR Your answer is partially correct. Calculate the depreciation charge on this equipment for 2013 and for 2020, and the total charge for the period from 2014 to 2019, inclusive, under each of the following six assumptions for partial periods: (Round answers to 0 decimal places, eg. 5,275.) 1. Depreciation is calculated for the exact period of time during which the asset is owned. (Use 365 days for your base.) Depreciation is calculated for the full year on the January 1 balance in the asset account. 2.

On March 10, 2020, Pearl Limited sold equipment that it bought for $134,640 on August 21, 2013. It was originally estimated that t equipment would have a useful life of 12 years and a residual value of $12,000 at the end of that time, and depreciation has been calculated on that basis. The company uses the straight-line method of depreciation and prepares its financial statements under IFR Your answer is partially correct. Calculate the depreciation charge on this equipment for 2013 and for 2020, and the total charge for the period from 2014 to 2019, inclusive, under each of the following six assumptions for partial periods: (Round answers to 0 decimal places, eg. 5,275.) 1. Depreciation is calculated for the exact period of time during which the asset is owned. (Use 365 days for your base.) Depreciation is calculated for the full year on the January 1 balance in the asset account. 2.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: On January 1, 2017, Extensive Manufacturing purchased a machine for $780,000 that it expected to…

A: Asset disposal: It involves removing assets from accounting records(balance sheet).An asset may…

Q: Bob's Construction Company sold a bobcat (equipment) to another construction company for $81,000…

A: Fixed assets are those assets which are being purchased for long period of time. Depreciation is…

Q: Calculate the depreciation for each year of the truck's life. (Roune

A: The double declining balance (DDB) method is an accelerated depreciation calculation used in…

Q: Faster company purchased equipment in 2015 for $104,000 and estimated an $8,000 salvage value at the…

A: A journal entry is a record of a commercial transaction in an organization's accounting software. It…

Q: On March 1, 2023, Sunland Ltd. purchased a machine for $63,000 by paying $21,000 down and issuing a…

A: Fixed assets are those assets which are being held by business for longer period of time. These are…

Q: Dewey Corporation purchased a machine for $340,000 on January 1, 2012. The machine had an…

A: Depreciation is considered as an expense charge on the value of the Asset. The most common method…

Q: The Peridot Company purchased machinery on January 2, 2019, for $900,000. A five-year life was…

A: Depreciation under straight line method is enumerated as below: Depreciation= (Cost of asset -…

Q: 1. Journal Entry on June 02, 2017. 2 A

A: "Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Prepare all relevant entries relating to the equipment for the period from 1 July 2016 to 30 June…

A: Journal entry is recorded at the time when the asset is purchased in the books of the accounts on…

Q: Sheffield Corp., which has a calendar year accounting period, purchased a new machine for $90000 on…

A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…

Q: Tamarisk Company purchased a computer for $9,280 on January 1, 2019. Straight-line depreciation is…

A: Depreciation is a reduction in the value of assets due to the usage of that asset. We can evaluate…

Q: Harley Davis Inc. started its unicycle manufacturing business in 2020 and acquired $600,000 of…

A: Depreciation expense is the amount depreciated on a company's assets in a single period, whereas…

Q: Basalt Inc bought a new vehicle on September 1, 2021 for $50,000. The vehicle is estimated to have a…

A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…

Q: On January 1, 2020, Grand Manufacturing purchased a machine for $370,000 that it expected to have a…

A: Journal Entry :— It is an act of recording transactions in books of account when transaction…

Q: The Canliss Milling Company purchased machinery on January 2, $930,000. A five-year life was…

A: A journal entry is a basic accounting record that is used to chronologically track financial…

Q: Dewey Corporation purchased a machine for $340,000 on January 1, 2012. The machine had an…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Howarth Manufacturing Company purchased equipment on June 30, 2017, at a cost of $155,000. The…

A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…

Q: Pinnacle Corporation has been using the straight-line depreciation method to depreciate some office…

A: When a company requires to sacrifice the consistent accounting methods and procedures, to enhance…

Q: Hadley Zavis Inc. started its unicycle manufacturing business in 2020 and acquired $600,000 of…

A: Depreciation is the reduction in value of fixed assets over the period. Under straight line method,…

Q: The Canliss Milling Company purchased machinery on January 2, 2019, for $800,000. A five-year life…

A: Calculation of depreciation value over remaining 3 years: Particulars Amount Cost of the…

Q: The Sirap manufacturing Co. bought equipment on 1/4/2018 for $120 M. The machine has an expected…

A: Depreciation is considered an expense charge on the value of the asset. It can be calculated by…

Q: Howarth Manufacturing Company purchased equipment on June 30, 2017, at a cost of $800,000. The…

A: Depreciation is considered an expense charge on the value of the asset. It can be calculated by…

Q: Calculate the depreciation expense, accumulated depreciation, and book value of the asset for each…

A: Depreciation per Year = (Historical cost - Residual Value)/Useful life It is pertinent to note that…

Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

Topic Video

Question

On March 10, 2020, Pearl Limited sold equipment that it bought for $134,640 on August 21, 2013. It was originally estimated that the
equipment would have a useful life of 12 years and a residual value of $12,000 at the end of that time, and depreciation has been
calculated on that basis. The company uses the straight-line method of depreciation and prepares its financial statements under IFRS.
Your answer is partially correct.
Calculate the depreciation charge on this equipment for 2013 and for 2020, and the total charge for the period from 2014 to
2019, inclusive, under each of the following six assumptions for partial periods: (Round answers to O decimal places, e.g. 5,275.)
1.
Depreciation is calculated for the exact period of time during which the asset is owned. (Use 365 days for your base.)
2.
Depreciation is calculated for the full year on the January 1 balance in the asset account.
3.
Depreciation is calculated for the full year on the December 31 balance in the asset account.
4.
Depreciation for a half year is charged on plant assets that are acquired or disposed of during the year.
Depreciation is calculated on additions from the beginning of the month following their acquisition and on disposals to
the beginning of the month following the disposal.
5.
6.
Depreciation is calculated for a full period on all assets in use for over half a year, and no depreciation is charged on
assets in use for less than half a year. (Use 365 days for your base.)

isumptions
2013
2014-2019
2020
To
1.
2$
61320
61320
10220
3.
10220
61320
4.
5110
61320
5110
5.
3407
61320
2555
6.
61320
%24
%24
%24
2.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction

VIEW

Step 2 Calculating the required part.

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

On January 1, 2021, Slim Inc. purchased machinery for $350,000. The machinery had an estimated useful life of 10 years and a salvage value of $35,000. The company elected to use sum-of-years digits depreciation. At the beginning of 2025, Slim decided to switch to the straight-line method of depreciation and reassessed the remaining useful life of the machinery to be 4 years with no change in the salvage value. A change in depreciation methods together with a change in the useful life of the asset is Question 26Answer a. a change in accounting principle. b. an error correction. c. a change in accounting principle effected as a change in accounting estimate. d. a change in accounting estimate.
Oman Cables Co. Purchased a machine for OR45,000 on January 1, 2020. The machine is expected to have a four - year life, with a residual value of OR5,000 at the end of four years. Using the sum - of - the years' - digits method, depreciation for 2021 would be Select one: a. 16,000 b. 12,000 C. 13,500 O d. none of the above is correct
Blossom Enterprises purchased equipment on January 1, 2020, at a cost of €405,000. Blossom uses the straight-line depreciation method, a 5-year estimated useful life, and no residual value. At the end of 2020, independent appraisers determined that the assets have a fair value of €330,000. . Prepare the journal entry to record 2020 depreciation using the straight-line method. Account Titles and Explanation Debit Credit Depreciation Expense Accumulated Depreciation-Equipment (To record depreciation expense) please help me fill the table
Howarth Manufacturing Company purchased equipment on June 30, 2020, at a cost of $170,000. The residual value of the equipment was estimated to be $20,000 at the end of a five-year life. The equipment was sold on March 31, 2024, for $54,000. 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. + Complete this question by entering your answers in the tabs below. Required 1 No Prepare the journal entry to record the sale. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. General Journal 1 Required 2 No Event 1 1 Required 1 Required 2 Answer is not complete. 10 Event 1 Cash Accumulated depreciation-equipment Loss…
Swann Company sold a delivery truck on April 1, 2019. Swann had acquired the truck on January 1, 2015, for $42,000. At acquisition, Swann had estimated that the truck would have an estimated life of 5 years and a residual value of $5,000. Swann uses the straight-line method of depreciation. At December 31, 2018, the truck had a book value of $12,400. Required: 1. Prepare any necessary journal entries to record the sale of the truck, assuming it sold for: a. $12,000 b. $9,000 2. How should the gain or loss on disposal be reported on the income statement? 3. Assume that Swann uses IFRS and sold the truck for $12,000. In addition, Swann had previously recorded a revaluation surplus related to this machine of $4,000. What journal entries are required to record the sale?
On April 1, 2021, Metro Co. purchased machinery at a cost of $42,000. The machinery is expected to last 10 years and to have a residual value of $6,000. Required: Compute depreciation for 2021 (for 9 months, 4/1/21 ~ 12/31/21) assuming the sum-of-the-years'-digits method is used. No credit if no computation is shown.
On January 1, 2015, Jersey Corporation purchased for $800,000, equipment having a useful life of ten years and an estimated salvage value of $50,000. Jersey has recorded monthly depreciation of the equipment on the straight-line method. On May 1, 2020, the equipment was sold for $170,000. As a result of this sale, Jersey should recognize a gain/(loss) of?
Jersey Corporation, which has a calendar year accounting period, purchased a machine for $400,000 on April 1, 2016. At that time Jersey expected to use the machine for nine years and then sell it for $4,000. The machine was sold for $22,000 on Sept. 30, 2021. Assuming straight-line depreciation, calculate the gain(/(loss) at the sale of the machine.
Swann Company sold a delivery truck on April 1, 2019. Swann had acquired the truck on January 1, 2015, for $40,500. At acquisition, Swann had estimated that the truck would have an estimated life of 5 years and a residual value of $3,000. Swann uses the straight-line method of depreciation. At December 31, 2018, the truck had a book value of $10,500. Required: 1. Prepare any necessary journal entries to record the sale of the truck, assuming it sold for: a. $9,875 b. $7,275 2. How should the gain or loss on disposal be reported on the income statement? 3. Assume that Swann uses IFRS and sold the truck for $9,875. In addition, Swann had previously recorded a revaluation surplus related to this machine of $5,000. What journal entries are required to record the sale?