Question 2 On January 1, 2020, Silver Mining purchased a red truck. The truck cost $1,000,000 and was straight-line depreciated over 5 years with no expected salvage value. On June 30, Silver traded-in the red truck for a new blue truck. The terms of the trade-in were as follows: Silver traded in the red truck (that was purchased on Jan 1 2020) along with $123,000. Silver acquired a new blue truck. The sticker price of the new truck is $850,000 The new Blue truck will be straight-line depreciated over 3.5 years with no expected salvage value. Required: Show all of the journal entries for 2020, (including all entries for depreciation expense)

Question 2 On January 1, 2020, Silver Mining purchased a red truck. The truck cost $1,000,000 and was straight-line depreciated over 5 years with no expected salvage value. On June 30, Silver traded-in the red truck for a new blue truck. The terms of the trade-in were as follows: Silver traded in the red truck (that was purchased on Jan 1 2020) along with $123,000. Silver acquired a new blue truck. The sticker price of the new truck is $850,000 The new Blue truck will be straight-line depreciated over 3.5 years with no expected salvage value. Required: Show all of the journal entries for 2020, (including all entries for depreciation expense)

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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Example 2 Equipment was purchased at the beginning of 2018 for $850,000. At the time of its purchase, the equipment was estimated to have a useful life of six years and a salvage, value of $100,000. The equipment was depreciated using the straight-line method of depreciation through 2020. At the beginning of 2021, the estimate of useful life was revised to a total life of eight years and the expected salvage value was changed to $62,500. Required: Prepare the appropriate adjusting entry for depreciation for 2021.
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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5 On January 1, 2017, Cake Corporation purchased for P150,000, equipment having a useful life of ten years and an estimated salvage value of P8,000. Bennett has recorded monthly depreciation of the equipment on the straight-line method. On December 31, 2023, the equipment was sold for P28,000. As a result of this sale, Cake should recognize a gain (loss) of If you answer is loss, here is the format (PXXX,XXX). Example (P123,456) *
• Exel purchased equipment for $100,000 on January 1st, 2020. The equipment will last for 4 years with no salvage value and will be depreciated straight line. On January 1st, 2022, Exel determined the equipment should be revalued +5%, according to IFRS. Depreciation Expense for December 31st, 2022 will be : O $26,250. O $12,000. O $18,000. O $22,000.
A company sells a long-lived asset that originally cost $200,000 for $50,000 on December 31, 2018. The accumulated depreciation account had a balance of $110,000 after the current year's depreciation of $45,000 had been recorded. The company should recognize a: Multiple Choice $100,000 loss on disposal. $40,000 loss on disposal. $40,000 gain on disposal. $25,000 loss on disposal.
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