Problem 8-12 (IAA) On January 1, 2021, Canyon Company decided to decrease the estimated useful life of the patent from 10 years to 8 years. The patent was purchased on January 1, 2016 for P3,000,000 with estimated residual value of zero. The entity decided on January 1, 2021 to change the depreciation method from accelerated method to straight line. On January 1, 2021, the cost of the equipment is P8,000,000 and the accumulated depreciation is P3,400,000. The remaining useful life of the equipment on January 1, 2021 is 10 years and the residual value is P200.000. What amount should be recorded as total charge against 2021 income as a result of the accounting changes? a. 940,000 b. 960,000 c. 627,500 d. 647,500
Problem 8-12 (IAA) On January 1, 2021, Canyon Company decided to decrease the estimated useful life of the patent from 10 years to 8 years. The patent was purchased on January 1, 2016 for P3,000,000 with estimated residual value of zero. The entity decided on January 1, 2021 to change the depreciation method from accelerated method to straight line. On January 1, 2021, the cost of the equipment is P8,000,000 and the accumulated depreciation is P3,400,000. The remaining useful life of the equipment on January 1, 2021 is 10 years and the residual value is P200.000. What amount should be recorded as total charge against 2021 income as a result of the accounting changes? a. 940,000 b. 960,000 c. 627,500 d. 647,500
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 2E: Depreciation Methods Sorter Company purchased equipment for 200,000 on January 2, 2019. The...
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