Sandhill Company purchased a machine on January 1, 2022 for $912000. At the date of acquisition, the machine had an estimated useful life of 6 years with no salvage. The machine is being depreciated on a straight-line basis. On January 1, 2025, Sandhill determined, as a result of additional information, that the machine had an estimated useful life of 8 years from the date of acquisition with no salvage. An accounting change was made in 2025 to reflect this additional information. Assume that the direct effects of this change are limited to the effects on depreciation and the related tax provision and that the income tax rate was 30% in 2022, 2023, 2024, and 2025. What should be reported in Sandhill's income statement for the year ended December 31, 2025, as the cumulative effect on prior years of changing the estimated useful life of the machine? O $0 O $319200 O $91200 O $60800

Sandhill Company purchased a machine on January 1, 2022 for $912000. At the date of acquisition, the machine had an estimated useful life of 6 years with no salvage. The machine is being depreciated on a straight-line basis. On January 1, 2025, Sandhill determined, as a result of additional information, that the machine had an estimated useful life of 8 years from the date of acquisition with no salvage. An accounting change was made in 2025 to reflect this additional information. Assume that the direct effects of this change are limited to the effects on depreciation and the related tax provision and that the income tax rate was 30% in 2022, 2023, 2024, and 2025. What should be reported in Sandhill's income statement for the year ended December 31, 2025, as the cumulative effect on prior years of changing the estimated useful life of the machine? O $0 O $319200 O $91200 O $60800

Name: Sandhill Company purchased a machine on January 1, 2022 for $912000.
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: Sandhill Company purchased a machine on January 1, 2022 for $912000. At the date of acquisition, the machine had an estimateduseful life of 6 years with no salvage. The machine is being depreciated on a straight-line basis. On January 1, 2025, Sandh

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 8P: Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of...

See similar textbooks

Similar questions

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.
Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.
Oriole Company purchased a machine on January 1, 2019, for $927000. At the date of acquisition, the machine had an estimated useful life of 6 years with no salvage. The machine is being depreciated on a straight-line basis. On January 1, 2022, Oriole determined, as a result of additional information, that the machine had an estimated useful life of 8 years from the date of acquisition with no salvage. An accounting change was made in 2022 to reflect this additional information.Assume that the direct effects of this change are limited to the effect on depreciation and the related tax provision, and that the income tax rate was 40% in 2019, 2020, 2021, and 2022. What should be reported in Oriole's income statement for the year ended December 31, 2022, as the cumulative effect on prior years of changing the estimated useful life of the machine? $463500 $61800 $0 $92700
Sandhill Company purchased a machine on January 1, 2019, for $970000. At the date of acquisition, the machine had an estimated useful life of 6 years with no salvage. The machine is being depreciated on a straight-line basis. On January 1, 2022, Sandhill determined, as a result of additional information, that the machine had an estimated useful life of 8 years from the date of acquisition with no salvage. An accounting change was made in 2022 to reflect this additional information.What is the amount of depreciation expense on this machine that should be charged in Sandhill's income statement for the year ended December 31, 2022?
Cullumber Company purchased a machine on January 1, 2019, for $1008000. At the date of acquisition, the machine had an estimated useful life of 6 years with no salvage. The machine is being depreciated on a straight-line basis. On January 1, 2022, Cullumber determined, as a result of additional information, that the machine had an estimated useful life of 8 years from the date of acquisition with no salvage. An accounting change was made in 2022 to reflect this additional information. Assume that the direct effects of this change are limited to the effect on depreciation and the related tax provision, and that the income tax rate was 30% in 2019, 2020, 2021, and 2022. What should be reported in Cullumber's income statement for the year ended December 31, 2022, as the cumulative effect on prior years of changing the estimated useful life of the machine? $0 $100800 $67200 $504000
Blossom Company purchased a machine on January 1, 2019, for $792000. At the date of acquisition, the machine had an estimated useful life of 6 years with no salvage. The machine is being depreciated on a straight-line basis. On January 1, 2022, Blossom determined, as a result of additional information, that the machine had an estimated useful life of 8 years from the date of acquisition with no salvage. An accounting change was made in 2022 to reflect this additional information.Assume that the direct effects of this change are limited to the effect on depreciation and the related tax provision, and that the income tax rate was 30% in 2019, 2020, 2021, and 2022. What should be reported in Blossom's income statement for the year ended December 31, 2022, as the cumulative effect on prior years of changing the estimated useful life of the machine? $396000 $52800 $79200 $0
Sunland Company purchased a machine on January 1, 2016, for $820000. At the date of acquisition, the machine had an estimated useful life of 6 years with no salvage. The machine is being depreciated on a straight-line basis. On January 1, 2019, Sunland determined, as a result of additional information, that the machine had an estimated useful life of 8 years from the date of acquisition with no salvage. An accounting change was made in 2019 to reflect this additional information. What is the amount of depreciation expense on this machine that should be charged in Sunland's income statement for the year ended December 31, 2019? $82000 $102500 $164000 O $205000
On January 2, 2017, Union Co. purchased a machine for P264,000 and depreciated it by the straight-line method using an estimated useful life of eight years with no salvage value. On January 2, 2020, Union determined that the machine had a useful life of six years from the date of acquisition and will have a salvage value of P24,000. An accounting change was made in 2020 to reflect the additional data. The accumulated depreciation for this machine should have a balance at December 31, 2020, of O P146,000 O P154,000 O P176,000 O P160,000
On January 2, 2017, Union Co. purchased a machine for P264,000 and depreciated it by the straight-line method using an estimated useful life of eight years with no salvage value. On January 2, 2020, Union determined that the machine had a useful life of six years from the date of acquisition and will have a salvage value of P24,000. An accounting change was made in 2020 to reflect the additional data. The accumulated depreciation for this machine should have a balance at December 31, 2020, of a. P146,000 b. P176,000 c. P154,000 d. P160,000
On January 1, 2018, CRIMSON Company purchased machineries for P10,560,000 and depreciated it by the straight-line method using an estimated useful life of eight years with no salvage value. On January 1, 2021, CRIMSON determined that the machineries had a useful life of six years from the date of acquisition and will have a salvage value of P960,000. An accounting change was made in 2021 to reflect these additional data. How much should be the balance of the accumulated depreciation for these machineries on December 31, 2021? A. ₱ 6,160,000 B. ₱ 6,400,000 C. ₱ 7,040,000 D. ₱ 5,840,000
Swift Company purchased a machine on January 1, 2016, for $300,000. At the date of acquisition, the machine had an estimated useful life of six years with no residual value. The machine is being depreciated on a straight-line basis. On January 1, 2019, Swift determined, as a result of additional information, that the machine had an estimated useful life of eight years from the date of acquisition with no residual value. An accounting change was made in 2019 to reflect this additional information. a. Assume that the direct effects of this change are limited to the effect on depreciation and the related tax provision, and that the income tax rate was 30% in 2016, 2017, 2018, and 2019. What should be reported in Swift's income statement for the year ended December 31, 2019, as the cumulative effect on prior years of changing the estimated useful life of the machine? b. What is the amount of depreciation expense on this machine that should be charged in Swift's income statement for the…
On January 1, 2025, Sunland Corp, acquired a machine at a cost of $960000. It is to be depreciated on the straight-line method over a 5-year period with no residual value. Because of a bookkeeping error, no depreciation was recognized in Sunland's 2025 financial statements. The oversight was discovered during the preparation of Sunland's 2026 financial statements. Depreciation expense on this machine for 2026 should be O $384000. O $192000. O $240000. © $0.