Problem 28-19 (IAA) On January 1, 2022, Zoe Company showed accumulated depreciation on machinery with a balance of P3,700,000. On December 31, 2022, after the adjusting entries were posted, the accumulated depreciation showed a balance of P3,900,000. During 2022, a machine costing P1,300,000 was sold for P500,000 cash. The transaction resulted in a loss of P100,000. No other asset was disposed of during the current year. 1. What amount was recorded as accumulated depreciation on machine sold? a. 700,000 b. 500,000 c. 200,000 d. 300,000 2. What amount was recorded as depreciation for 2022? a. 900,000 b. 800,000 c. 200,000 d. 600,000

Problem 28-19 (IAA) On January 1, 2022, Zoe Company showed accumulated depreciation on machinery with a balance of P3,700,000. On December 31, 2022, after the adjusting entries were posted, the accumulated depreciation showed a balance of P3,900,000. During 2022, a machine costing P1,300,000 was sold for P500,000 cash. The transaction resulted in a loss of P100,000. No other asset was disposed of during the current year. 1. What amount was recorded as accumulated depreciation on machine sold? a. 700,000 b. 500,000 c. 200,000 d. 300,000 2. What amount was recorded as depreciation for 2022? a. 900,000 b. 800,000 c. 200,000 d. 600,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 8MC: On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was...

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Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.
The following are independent errors: a. In January 2019, repair costs of 9,000 were debited to the Machinery account. At the beginning of 2019, the book value of the machinery was 100,000. No residual value is expected, the remaining estimated life is 10 years, and straight-line depreciation is used. b. All purchases of materials for construction contracts still in progress have been immediately expensed. It is discovered that the use of these materials was 10,000 during 2018 and 12,000 during 2019. c. Depreciation on manufacturing equipment has been excluded from manufacturing costs and treated as a period expense. During 2019, 40,000 of depreciation was accounted for in that manner. Production was 15,000 units during 2019, of which 3,000 remained in inventory at the end of the year. Assume there was no inventory at the beginning of 2019. Required: Prepare journal entries for the preceding errors discovered during 2020. Ignore income taxes.
On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.
Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000
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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
P9-3B) Depreciation Methods On January 2 Javier Company purchased an electroplating machine to help manufacture a part for one of its key products. The machine cost $437,400 and was estimated to have a useful life of six years or 781,200 platings, after which it could be sold for $46,800. Required: a) Calculate each year's depreciation expense for the period under each of the following depreciation methods: Straight-line. Double-declining balance. Units-of-production. (Assume annual production in platings of 140,000; 180,000; 150,000; 125,000; 95,000; and 91,200.) b) Assume that the machine was purchased on September 1. Calculate each year's depreciation expense for the period under each of the following depreciation methods: Straight-line. Double-declining balance.
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