On March 10, 2023, Pearl Limited sold equipment that it bought for $192,000 on August 20, 2016. It was originally estimated that the equipment would have a useful life of 12 years and a residual value of $16,800 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 (a) Your answer is partic
On March 10, 2023, Pearl Limited sold equipment that it bought for $192,000 on August 20, 2016. It was originally estimated that the equipment would have a useful life of 12 years and a residual value of $16,800 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 (a) Your answer is partic
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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
None
Transcribed Image Text:On March 10, 2023, Pearl Limited sold equipment that it bought for $192,000 on August 20, 2016. It was originally estimated that the
equipment would have a useful life of 12 years and a residual value of $16,800 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
(a)
Your answer is partially correct
Calculate the depreciation charge on this equipment for 2016 and for 2023, and the total charge for the period from 2017 to
2022, inclusive, under each of the following six assumptions for partial periods: Round answers to O decimal places eg 5.275.
1
Depreciation is calculated for the exact period of time during which the asset is owned. Use 65 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
5
Depreciation is calculated on additions from the beginning of the month following their acquisition and
the beginning of the month following the disposal.
disposals to
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 Ces days for your base.
2016
2017-2022
15005.48
eTextbook and Media
2023
2712.33
14600
7300
Total
Sudamals Anduar
до
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education