Problem 2 Fixed Asset Theory. Assume that at 1/1/x1 P company sells a piece of equipment to S for $900,000. At the time of the sale, the asset was recorded on P's books as follows: Original Cost -AD NBV $600,000 -$200.000 $400,000 The asset has a 3 year remaining life. 1) How much would be the excess depreciation? 2) What would be the correct depreciation expense for 19x1 3) What would be the correct consolidated asset cost at 12/31/x1 4) What would be the corrected accumulated depreciation at 12/31/x2 Please provide the two consolidation journal entries at 12/31/x2:

Problem 2 Fixed Asset Theory. Assume that at 1/1/x1 P company sells a piece of equipment to S for $900,000. At the time of the sale, the asset was recorded on P's books as follows: Original Cost -AD NBV $600,000 -$200.000 $400,000 The asset has a 3 year remaining life. 1) How much would be the excess depreciation? 2) What would be the correct depreciation expense for 19x1 3) What would be the correct consolidated asset cost at 12/31/x1 4) What would be the corrected accumulated depreciation at 12/31/x2 Please provide the two consolidation journal entries at 12/31/x2:

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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5- Ferguson Company purchased a depreciable asset for €100,000. The estimated residual value is €10,000, and the estimated useful life is 10 years. The straight-line method will be used for depreciation. What is the depreciation expense of this asset? a. €10,000 b. €100,000 C. €90,000 d. €9,000
Problem J: On January 1, 2021, the Reddick Company purchased a mining right for P30,000,000. The mine's recoverable ore reserves are estimated to be 4,000,000 tons. Following the extraction of all ore, the company will be obligated by law to return the land to its original state. The present value of the restoration cost is P2,000,000. The company estimated that the property may be sold for P5,000,000. At a cost of P6,000,000, roads were built and other development costs were invested to aid in the extraction and transportation of the mined ore in early 2021. 200,000 tons of ore were extracted and sold in 2021. A new study conducted by a new mining engineer on December 31, 2022, revealed that 5,000,000 tons of ore were available for mining. 225,000 tons of ore were mined and sold in 2022. How much depletion expense should be recognized in 2022?
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An enterprise provides each of its directors with a car. The company purchases these at £40,000 each. After 4 years of use it replaces each vehicle and sells the older vehicles. It does this through an auction whilst placing a reserve price of 50% below the original cost. Using the reducing balance method of depreciation determine the annual change in value for each of the four years that the vehicle is owned. Once you have done that, answer the following: What is the depreciation (change in value) during year 4 alone? £3950 £3400 £4515
On Jan 1, 2021, Worsham Manufacturing purchased a new machine with an acquisition value of $350,000. It has been determined that the machine has a residual value of $16,000 with an estimated useful life of 5 years. Assuming the company uses the straight-line method to depreciate this type of asset, what would the book value be at the end of Year 5? O66.800 O 16,000 00 350.000 Question 20 4 pts lyr
8.8 A new drill press was purchased for $95,000 by trading in a similar machine that had a book value of $25,000. Assuming that the trade-in allowance is $20,000 and that $75,000 cash is to be paid for the new asset, what is the cost basis of the new asset for book depreciation purposes?
Problem 4 The following information pertains to Bosh Inc.'s depreciable assets: • Machine Y cost P525,000 and was acquired on January 1, 2016. On the acquisition date, the expected useful life was 12 years with no residual value. The straight line method was used. On January 1, 2020, it was estimated that the remaining life of the asset would be 4 years and that there would be a P25,000 residual value. • A building was purchased on January 1, 2017 for P3,000,000. The building was expected to have a useful life of 20 years with no residual value. The straight line depreciation method was used. On January 1, 2020, a change was made to the sum-of-the-years'-digits method of depreciation. No change was made to the estimated useful life and residual value of the building. _3. What is the depreciation expense of Machine Y for 2020? _4. What is the depreciation expense of building for 2022?
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