Problem 27-3 (IAA)At the beginning of current year, Definite Company acquiredthe following assets:ResidualUseful lifeCostvaluein yearsMachinery310,00010,0005Office equipment 000, 110,000Building10,000101,600,000100,00015Delivery equipment430,00030,0004Required:a. Compute the composite depreciation rate.b. Compute the composite life.cPrepare journal entry to record the depreciation for thecurrent year.Problem 27-4 (ACP) predios fue!Happy Company owned a power plant which consisted of thefollowing assets all acquired at the beginning of current year:ResidualUseful lifeCostvaluein years6,100,000100,00020Building 00Machinery doEquipment14:450,00052,550,0001,030,000000,030,00010Required:a. Compute the composite rate.b. Compute the composite life.c. Prepare journal entry to record the depreciation for thecurrent year following the composite method.d.Prepare journal entry to record the retirement of themachinery at the end of the fifth year assuming the proceedsfrom retirement amount to P40,000.e. Prepare journal entry to record the depreciation for thesixth year following the composite method.MMMWab.d.PrNoderAtP5.accInP2,5At torigfor F1 Wنحنمنهدنندهb.C.d.Was Problem 27-5 (AICPA Adapted)A T-TASilent Company provided the following schedule ofmachinery:Estimatedresidual valueUseful lifein yearsTotal cost550,00050,00020Machine A200,00020,000Machine B15540,000Machine CWhat is the composite life of the assets?13.3a.b. 16.0c. 18.0d. 19.8Problem 27-6 (IAA)Norraine Company used the composite method ofdepreciation based on a composite rate of 25%.At the beginning of 2020, the total cost of equipment wasP5,000,000 with a total residual value of P600,000. Theaccumulated depreciation was P3,000,000 at that time.In January 2020, the entity purchased an equipment forP2,500,000 with no residual value.At the end of 2020, the entity sold an equipment with anoriginal cost of P1,000,000 and a residual value of P200,000for P350,000. This asset was acquired on January 1, 2018.1. What is the depreciation for 2020?a. 1,625,000b. 1,875,000c. 1,125,000d. 975,0002. What is the gain or loss from the derecognition of theasset on December 31, 2020?a. 100,000 gainb. 150,000 lossC.50,000 loss0d.

Depreciation: It is the reduction in the value of the asset over the period. This includes normal…

Problem 27-3 (IAA) At the beginning of current year, Definite Company acquired the following assets: Residual Useful life Cost value in years Machinery 310,000 10,000 5 110,000 10,000 10 Office equipment Building 1,600,000 100,000 15 Delivery equipment 430,000 30,000 Required: a. Compute the composite depreciation rate. b. Compute the composite life. C Prepare journal entry to record the depreciation for the current year.

Problem 27-3 (IAA) At the beginning of current year, Definite Company acquired the following assets: Residual Useful life Cost value in years Machinery 310,000 10,000 5 110,000 10,000 10 Office equipment Building 1,600,000 100,000 15 Delivery equipment 430,000 30,000 Required: a. Compute the composite depreciation rate. b. Compute the composite life. C Prepare journal entry to record the depreciation for the current year.

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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