Oregon Company is in the process of preparing its financial statements for 2024 Assume that no entries for any depreciation or accounting changes have been recorded in 2024The following information related to depreciation of fixed assets is provided to yourOregon purchased a machine on July 1, 2022, at a cost of $80,000. The machine has a salvage value of $8,000 and a useful life of 8 years. Oregon's bookkeeper recorded straightline depreciation in 2022 and 2023 but erroneously assumed a useful life of 10 yearsFollowing all appropriate adjusting/correcting journal entries, the 12/31/24 balance of Accumulated Depreciation Machine will beSelect onea $22,500Ob $27.500Oc $31,556Od $23,400O $18,000Clear my choice

Lets understand the basics. Depreciation is a reduction in value of asset due to wear and tear,…

Oregon Company is in the process of preparing its financial statements for 2024 Assume that no entries for any depreciation or accounting changes have been recorded in 2024 The following information related to depreciation of fixed assets is provided to you Oregon purchased a machine on July 1, 2022 at a cost of $80,000. The machine has a salvage value of $8,000 and a useful life o years Oregon's bookkeeper recorded straight line depreciation in 2022 and 2023 but erroneously assumed a useful life of 10 years Following all appropriate adjusting/correcting journal entres, the 12/31/24 balance of Accumulated Depreciation Machine will be Select one a $22.500 Ob $27,500 O $31,556 Od $23.400 O $18,000 Clear my choice

Oregon Company is in the process of preparing its financial statements for 2024 Assume that no entries for any depreciation or accounting changes have been recorded in 2024 The following information related to depreciation of fixed assets is provided to you Oregon purchased a machine on July 1, 2022 at a cost of $80,000. The machine has a salvage value of $8,000 and a useful life o years Oregon's bookkeeper recorded straight line depreciation in 2022 and 2023 but erroneously assumed a useful life of 10 years Following all appropriate adjusting/correcting journal entres, the 12/31/24 balance of Accumulated Depreciation Machine will be Select one a $22.500 Ob $27,500 O $31,556 Od $23.400 O $18,000 Clear my choice

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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2. Prepare the year-end Journal entry for depreciation on December 31, 2024. Assume that the company uses the double-declining- balance method instead of the straight-line method. Required Information [The following information applies to the questions displayed below.] Wardell Company purchased a minicomputer on January 1, 2022, at a cost of $56,000. The computer was depreciated using the straight-line method over an estimated five-year life with an estimated residual value of $11,000. On January 1, 2024, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $2,000. Note: If no entry is required for a transaction/event, select "No Journal entry required" In the first account field. Do not round Intermediate calculations. Round your final answers to nearest whole dollar. No 1 Event 1 Answer is not complete. General Journal Depreciation expense Accumulated depreciation-computer Debit Credit
Assume that Bloomer Company purchased a new machine on January 1, 2017, for $80,000. The machine has an estimated useful life of nine years and a residual value of $8,000. Bloomer has chosen to use the straight-line method of depreciation. On January 1, 2019, Bloomer discovered that the machine would not be useful beyond December 31, 2022, and estimated its value at that time to be $2,000. Required: 1. Calculate the depreciation expense, accumulated depreciation, and book value of the asset for each year 2017 to 2022. If necessary, round any depreciation calculations to the nearest dollar.
Swifty Company purchased a new plant asset on April 1, 2025, at a cost of $720,000. It was estimated to have a service life of 20 years and a salvage value of $56,400. Swifty accounting period is the calendar year. (a) 4 Compute the depreciation for this asset for 2025 and 2026 using the sum-of-the-years'-digits method. (Do not round intermediate calculations. Round final answers to 0 decimal places, e.g. 45,892.) Depreciation for 2025 Depreciation for 2026 IA $ $
Vaughn Corporation owns machinery that cost $26,000 when purchased on July 1, 2021. Depreciation has been recorded at a rate of $3,120 per year, resulting in a balance in accumulated depreciation of $10,920 at December 31, 2025. The machinery is sold on September 1, 2026, for $6,760. Prepare journal entries to (a) update depreciation for 2026 and (b) record the sale. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) No. Account Titles and Explanation (a) (b) Debit Credit
Mango Company purchased a delivery truck for $66,000 on January 2, 2021. The useful life was estimated to be 5 years and the salvage value was estimated at $26,000. The truck is depreciated using the straight-line method. When preparing adjusting entries for December 31, 2023, it was discovered that the salvage value had not been deducted when computing depreciation for 2021 and 2022. The correct amount of deprecation was recorded for 2023. What additional journal entry should be made? Answer a. Debit Accumulated Depreciation for $10,400 and credit Retained Earnings for $10,400. b. Debit Accumulated Deprecation for $15,600 and credit Depreciation Expense for $15,600. c. Debit Accumulated Deprecation for $16,000 and credit Retained Earnings for $16,000. d. No additional entry should be made as the error will be accounted for in the current period and prospectively.
Marigold Company owns equipment that cost $79,000 when purchased on January 1, 2019. It has been depreciated using the straight-line method based on an estimated salvage value of $7,900 and an estimated useful life of 5 years. Depreciation expense adjustments are recognized annually. Instructions: Prepare Marigold Company's journal entries to record the sale of the equipment in these four independent situations. Update depreciation on assets disposed of at time of sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) (a) (b) (c) (d) (e) (A) SR. Account Titles and Explanation (a) (b) Sold for $45,000 on January 1, 2022. Sold for $45,000 on April 1, 2022. Sold for $17,000 on January 1, 2022. Sold for $17,000 on September 1, 2022 Repeat (a), assuming Marigold uses double-declining balance…
Blossom Company purchased a machine on January 1, 2019, for $792000. 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, Blossom 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 30% in 2019, 2020, 2021, and 2022. What should be reported in Blossom'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? $396000 $52800 $79200 $0
Tamarisk Company purchased a new plant asset on April 1, 2025, at a cost of $760,000. It was estimated to have a service life of 20 years and a salvage value of $62,800. Tamarisk' accounting period is the calendar year. (a) Compute the depreciation for this asset for 2025 and 2026 using the sum-of-the-years-digits method. (Do not round intermediate calculations. Round final answers to O decimal places, e.g. 45,892.) Depreciation for 2025 $ Depreciation for 2026 $
Blue Corporation purchased a new machine for its assembly process on August 1, 2025. The cost of this machine was $169,800. The company estimated that the machine would have a salvage value of $16,800 at the end of its service life. Its life is estimated at 5 years, and its working hours are estimated at 20,000 hours. Year-end is December 31. Compute the depreciation expense under the following methods. Each of the following should be considered unrelated. (Round depreciation rate per hour to 2 decimal places, e.g. 5.35 for computational purposes. Round your answers to O decimal places, e.g. 45,892.) (a) Straight-line depreciation for 2025 (b) (c) (d) Activity method for 2025, assuming that machine usage was 800 hours Sum-of-the-years'-digits for 2026 Double-declining-balance for 2026 GA $ GA GA $ $
At the beginning of 2021, Westglow Company purchased equipment for $525,000 that was assigned an estimated useful life of 5 years and an estimated salvage value of $50,000. The company uses straight-line depreciation for all of its plant and equipment. When preparing adjusting entries at December 31, 2024, it was discovered that the bookkeeper had failed to deduct the salvage value in computing the depreciation base for 2021, 2022, and 2023. Westglow issues 2-year comparative financial statements. Which of the following statements describes the procedure that should be followed at December 31, 2024? Answer a. Westglow should compute the amount of annual depreciation expense that should have been recorded for 2023 and adjust accumulated depreciation and depreciation expense for the difference. The financial statements for 2023 should be restated and the effect of the error should be reported as an adjustment to the beginning balance of retained earnings for 2024. b.…
Equipment was acquired on January 1, 2025 at a cost of $162,000. The equipment was originally estimated to have a salvage value of $8,200 and an estimated life of 10 years. Depreciation has been recorded through December 31, 2027 using the straight-line method. On January 1, 2028, the estimated salvage value was revised to $14,200 and the useful life was revised to a total of 8 years. Prepare the journal entry to record depreciation expense for 2028. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Depreciation expense for 2028 $ Adjusting journal entry at 12/31/28: Date Account Titles and Explanation Dec. 31 eTextbook and Media List of Accounts Save forlater Debit Credit
Victor Mineli, the new controller of Ivanhoe Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2025. Here are his findings: Type of Asset Building Warehouse Date Acquired (a) Jan. 1. 2017 Jan, 1, 2020 Cost $857,000 129,500 Accumulated Depreciation, Jan. 1, 2025 $159,100 Revised annual depreciation $ 24,960 Useful Life (in years) Old Proposed 40 58 20 Building 25 All assets are depreciated by the straight-line method. Ivanhoe Company uses a calendar year in preparing annual financial statements. After discussion, management has agreed to accept Victor's proposed changes. (The "Proposed" useful life is total life, not remaining life.) Salvage Value Old $61,500 4,700 Compute the revised annual depreciation on each asset in 2025. (Round answers to 0 decimal places. e.g. 125.) Warehouse Proposed $35,600 5,300