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FINANCIAL ACCOUNTING
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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Leody Company purchased a machine on December 1, 2020 at an invoice price of P4,500,000 with terms 2/10, n/30. On December 10, 2020, Leody paid the required amount for the machine. On December 1, 2020, Leody paid P80,000 for delivery of the machine and on December 31, 2020, it paid P310,000 for installation and testing of the machine. The machine was ready for use on January 1, 2021. It was estimated that the machine would have a useful life of 5 years and a residual value of P800,000. Engineering estimate indicated that the useful life in productive units was 200,000. Units actually produced during the first two years were 30,000 in 2021 and 48,000 in 2022. Leody Company decided to use the output method of depreciation. What is the accumulated depreciation of the machine on December 31, 2022?
Transcribed Image Text:Leody Company purchased a machine on December 1, 2020 at an invoice price of P4,500,000 with terms 2/10, n/30. On December 10, 2020, Leody paid the required amount for the machine. On December 1, 2020, Leody paid P80,000 for delivery of the machine and on December 31, 2020, it paid P310,000 for installation and testing of the machine. The machine was ready for use on January 1, 2021. It was estimated that the machine would have a useful life of 5 years and a residual value of P800,000. Engineering estimate indicated that the useful life in productive units was 200,000. Units actually produced during the first two years were 30,000 in 2021 and 48,000 in 2022. Leody Company decided to use the output method of depreciation. What is the accumulated depreciation of the machine on December 31, 2022?
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