Skysong Corp. purchased machinery on January 1, 2019 for $692,000. Straight-line depreciation is used. At the time managementestimated that the machinery would be used over 10 years and would have a residual value of $47,000. It is now December 31, 2023and management has determined that the machine's life is now a total of 12 years with no residual value. No adjusting journal entrieshave been recorded yet for the 2023 year-end.

The objective of the question is to calculate the depreciation expense for the year 2023 after the…

Answered: Skysong Corp. purchased machinery on…

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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For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2018 for $2,816,000. Its useful life was estimated to be six years with a $224,000 residual value. At the beginning of 2021, Clinton decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: ($ in thousands) Year Straight-Line Declining Balance Difference 2018 $ 432 $ 938 $ 506 2019 432 626 194 2020 432 417 (15 ) $ 1,296 $ 1,981 $ 685 Required:2. Prepare any 2021 journal entry related to the change. (Enter your answers in dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
On January 2, 2019, a machine was purchased for $300,000. It has an estimated useful life of ten years and an estimated residual value of $30,000. The company uses the declining-balance method of depreciation with a declining balance rate of 8%. A)Depreciation expense for 2019 = $_________________________. B)Depreciation expense for 2020 = $_________________________.
On January 1, 2021, Slim Inc. purchased machinery for $350,000. The machinery had an estimated useful life of 10 years and a salvage value of $35,000. The company elected to use sum-of-years digits depreciation. At the beginning of 2025, Slim decided to switch to the straight-line method of depreciation and reassessed the remaining useful life of the machinery to be 4 years with no change in the salvage value. A change in depreciation methods together with a change in the useful life of the asset is Question 26Answer a. a change in accounting principle. b. an error correction. c. a change in accounting principle effected as a change in accounting estimate. d. a change in accounting estimate.
On January 1, 2020, Cullumber Corp. acquired a machine at a cost of $1020000. 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 Cullumber's 2020 financial statements. The oversight was discovered during the preparation of Cullumber's 2021 financial statements. Depreciation expense on this machine for 2021 should be $255000. $204000. $408000. $0.
Oman Cables Co. Purchased a machine for OR45,000 on January 1, 2020. The machine is expected to have a four - year life, with a residual value of OR5,000 at the end of four years. Using the sum - of - the years' - digits method, depreciation for 2021 would be Select one: a. 16,000 b. 12,000 C. 13,500 O d. none of the above is correct
Oklahoma Company purchased a machine on January 1, 2020. The machine had a cost of $520,000 with a $20,000 residual value. The estimated useful life of the machine was eight years. On January 1, 2022, due to technological innovations, the estimated useful life was reduced by two years from the original life and the residual value was reduced by 50%. The company uses straight-line depreciation. Required: Prepare the journal entry to record the annual depreciation on December 31, 2022. Show your calculations before you post the journal entry.
Meca Concrete purchased a mixer on January 1, 2022, at a cost of $45,000. Straight-line depreciation for 2022 and 2023 was based on an estimated eight-year life and $3,000 estimated residual value. In 2024, Meca revised its estimate and now believes the mixer will have a total service life of only six years, and that the residual value will be only $2,000. Required:Compute depreciation for 2024 and 2025.
Tamarisk Corp. (TC) purchased a building in early January 2020, and classified the cost of the basic structure of $128,000 in an account called Buildings. TC accounts for this class of asset using the revaluation model, revalues the class every three years, and uses straight-line depreciation. The building structure is expected to have a useful life of 25 years with no residual value. TC has a December 31 fiscal year end. The asset's fair value at December 31, 2022, is $114,540. (a1) Calculate TC's depreciation for the first three years. TC's annual depreciation $ Save for Later 2020 2021 2022 Attempts: 0 of 1 used Submit Answer
For financial reporting, Kumas Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2021 for $2,736,000. Its useful life was estimated to be six years with a $204,000 residual value. At the beginning of 2024, Kumas decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: ($ in thousands) Declining Balance Difference Year 2021 Straight- Line $ 422 $ 912 $ 490 2022 2023 422 422 608 186 405 (17) $ 1,266 $ 1,925 $ 659 Required: 2. Prepare any 2024 journal entry related to the change. Note: Enter you answers rounded to the nearest dollar. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 Record the adjusting entry for depreciation in 2024. Note: Enter debits before credits. Event 1 General Journal Debit Credit Record entry Clear entry View general journal
For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2021 for $2,880,000. Its useful life was estimated to be four years, with a $168,000 residual value. At the beginning of 2024, Clinton decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: ($ in thousands) Year Straight Line Declining Balance Difference 2021 $ 678 $ 1,440 $ 762 2022 678 720 42 2023 678 360 (318) $ 2,034 $ 2,520 $ 486 Required: 2. Prepare any 2024 journal entry related to the change.
Monty Enterprises Ltd. purchased machinery on September 1, 2020. The machinery cost $358,200, and was estimated to have a 10- year useful life and a residual value of $58,200. Straight-line depreciation was recorded each year-end (December 31) to the end of December 31, 2024. On January 1, 2025, Monty re-evaluated the machinery. It was now believed that the equipment could be resold for $17,000 on December 31, 2027. Prepare the journal entry to record depreciation for 2025. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Date Dec. 31 Account Titles and Explanation Depreciation Expense Accumulated Depreciation - Machinery Debit 100000 Credit 100000

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