Answered: Piper Ventura acquired Office Equipment…

Piper Ventura acquired Office Equipment costing P352,800 on April 1, 2020. The equipment is expected to last 5 years after which it will be worthless

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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On October 1, 2022, Abbott Inc. purchased equipment costing $700,000 by paying $150,000 cash and signing a $550,000, 10%, 1-year note for the remainder. The face value of the note plus interest is due when the note matures in one year. The equipment will be used in a variety of R&D activities. It is expected to have a useful life of 5-years and a residual value of $20,000. Abbott uses the DDB method for the equipment. Required: In the journal below, record the equipment purchase on October 1, and record depreciation and accrued interest for 2022. Round all calculations to the nearest whole month and whole dollar.
Crane Company purchases an oil tanker depot on January 1, 2020, at a cost of $639,700. Crane expects to operate the depot for 10 years, at which time it is legally required to dismantle the depot and remove the underground storage tanks. It is estimated that it will cost $69,980 to dismantle the depot and remove the tanks at the end of the depot's useful life. (a) Your answer is partially correct. Prepare the journal entries to record the depot and the asset retirement obligation for the depot on January 1, 2020. Based on an effective-interest rate of 6%, the present value required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) the asset retirement obligation on January 1, 2020, is $39,076. (If no entry is Date Account Titles and Explanation Debit Credit January 1, depot 2020 639700 Cash 639700 (To record the depot) January 1, 2020 depot 39076 Asset Retirement…
On January 1, 2021 the Hogan Manufacturing Company purchased a machine for $250,000. The company expects the service life of the machine to be 5 years and its anticipated residual value to be $40,000. The company's financial year end is December 31 and the straight line method is used for all depreciable assets. Jan 1, 2023, the company revised its estimate of service life from 5 to 8 years and also revised its estimated residual value to be $22,000. Required: Calculate depreciation for 2023
On December 31, 2020, a company invested $2,150,000 in an asset. The company estimates that 3,000,000 tonnes will be excavated over the 20 year life of the asset. In order to decommission the asset at the end of the useful life it is estimated that it will cost $485,000. The depreciation method is based on units of production method. The relevant discount rate is 6%. A total of 220,000 tonnes and 205,000 tonnes were excavated in 2021 and 2022 respectively. Required Prepare all journal entries required for the years ended December 31, 2020, 2021 and 2022. (HINT: include the original purchase journal entry and subsequent depreciation and interest entries.)
On January 1, 2020, Northeast USA Transportation Company purchased a used aircraft at a cost of $64,400,000. Northeast USA expects the plane to remain useful for five years (6.000,000 miles) and to have a residual value of $6,400,000. Northeast USA expects to fly the plane 725,000 miles the first year, 1,300,000 miles each year during the second, third, and fourth years, and 1,375,000 miles the last year. Read the requirements 1. Compute Northeast USA's depreciation for the first two years on the plane using the straight-line method, the units-of-production method, and the double-declining balance method. a. Straight-line method Using the straight-line method, depreciation is for 2020 and for 2021.
On January 1, 2020, QuickAir Transportation Company purchased a used aircraft at a cost of $64,400,000. QuickAir expects the plane to remain useful for five years (7,000,000 miles) and to have a residual value of $6,400,000. QuickAir expects to fly the plane 925,000 miles the first year, 1,225,000 miles each year during the second, third, and fourth years, and 2,400,000 miles the last year. Read the requirements. 1. Compute QuickAir's depreciation for the first two years on the plane using the straight-line method, the units-of-production method, and the double-declining balance method. a. Straight-line method Using the straight-line method, depreciation is for 2020 and for 2021.
On Jan. 1, 2021, Mother, Inc., whose financial year end is every Dec. 31, purchased a unit of equipment at a total cost of P10,000,000. The equipment is estimated to have a useful life of 5 years with a residual value equal to 10% of its cost. - How much is the depreciation expense for 2021 using the straight line depreciation method? - How much is the depreciation expense for 2024 using the SYD depreciation method? - How much is the depreciation expense for 2025 using the double declining balance depreciation method?
On January 1, 2024, Hobart Manufacturing Company purchased a drill press at a cost of $36,000. The drill press is expected to last 10 years and has a residual value of $6,000. During its 10-year life, the equipment is expected to produce 500,000 units of product. In 2024 and 2025, 25,000 and 84,000 units, respectively, were produced. Required: Compute depreciation for 2024 and 2025 and the book value of the drill press on December 31, 2024 and December 31, 2025, assuming the double-declining-balance method is used. Depreciation Book Value 2024 2025
On July 1, 2020 Waterway's Greenhouse purchased a new delivery truck for $100,000. Waterway estimates that the delivery truck will have a five-year useful life, or 225,000 kilometres, and a residual value of $10,000. Waterway's Greenhouse has a December 31 year end. Waterway drove the truck 14,000 km in 2020 and 38,000 km in 2021. Calculate depreciation expense using the straight-line method for 2020 and 2021. 2020 2021 Depreciation Expense eTextbook and Media Calculate depreciation expense using the double-diminishing-balance method for 2020 and 2021. 2020 2021 Depreciation Expense %24 eTextbook and Media Calculate depreciation expense using the units-of-production method for 2020 and 2021. (Round depreciable amount per unit to 2 decimal places, eg. 5.27 and the final answers to O decimal places, eg. 5,275.) 2020 2021 Depreciation Expense %24 %24
Sami Products purchased a machine for $85,000 on July 1, 2020. The company intends to depreciate it over 8 years using the double-declining balance method. Salvage value is $5,000. What is the depreciation for 2021.
On September 30, 2021, Bricker Enterprises purchased a machine for $200,000. The estimated service life is 10 years with a $20,000 residual value. Bricker records partial-year depreciation based on the number of months in service.Depreciation (to the nearest dollar) for 2022, using sum-of-the-years'-digits method, would be: Multiple Choice $31,909. $29,455. $35,456. $54,000.
Gwynedd Industries uses straight-line depreciation on all of its depreciable assets. The company records annual depreciation expense at the end of each calendar year. On January 1, 2020, the company purchased a machine costing $170,000, and it has an estimated useful life of 15 years and an estimated residual value of $26,000. Depreciation for partial years is rounded to the nearest full month. In 2024, management decided to revise its estimated life from 18 years to 25 years. No change was made in the estimated residual value. The revised estimate of the useful life was decided prior to recording annual depreciation expense for the year ended December 31, 2024. Instructions: a) Prepare journal entries in chronological order for the given events, beginning with the purchase of machinery on January 1, 2020. Record depreciation expense separately for each year 2020 through 2024 (5 separate entries for each year's depreciation) (Hint: record the purchase and annual depreciation for each…