The audit senior has asked out to perform analytical procedures to obtain substantive evidence on the reasonableness of recorded depreciation expense of the delivery vehicles of a client. Changes in the account occurred pretty much evenly during the year. The estimated useful life is six years. Estimated salvage value is 10% of original cost. Straight-line depreciation is used. Additional information Delivery equipment per general ledger shows: Beginning balance = 380,500 Additions = 154,000 Disposals = (95,600) Ending balance = 438,900   Current year depreciation expense per books = P60,500 Based on this information, estimate the amount of depreciation expense for the year using analytical procedures. Does the recorded depreciation expense seem acceptable? Explain What is the impact of the result of this analytical procedure on other substantive procedures that the auditor may perform

Q: old Mining Company has purchased a tract of mineral land for $972,000. It is estimated that this…

A: Depletion is used in the mining and depletion is decrease in value of mines due to extraction of…

Q: Answer the following questions related to depreciation expense calculation. Be sure to read each…

A: Since you have posted multiple questions, we will do the first one for you. Please post the other…

Q: Copy equipment was acquired at the beginning of the year at a cost of $37,120 that has an estimated…

A: Depreciation is the allocation of cost of asset over the useful life of the asset. It can be charged…

Q: Bugle Company’s property, plant, and equipment and related accumulated depreciation accounts had the…

A: Given information: Cost of asset = 6,630,000 Accumulated depreciation = 3,315,000 Therefore,…

Q: Hhi. What is the answr/solution to this problem? Depreciation by Two Methods; Sale of Fixed Asset…

A: Straight line depreciation is a method of charging same or constant depreciation over the life of…

Q: Suppose a $10,000 machine will be used for five years. At that time, the machine's salvage value…

A: 1. Depreciation ScheduleStep 1: Calculate Straight Line Depreciation (SLDP) Rate = 1/5 years =…

Q: Equipment was acquired at the beginning of the year at a cost of $280,000. The equipment was…

A: Depreciation is the gradual conversion of the cost of a  fixed asset into expense. The various…

Q: depreciation to be charged against the machine during each of the remaining years of its useful…

A: Accounting for change in accounting estimate is envisaged in IAS 8 It is pertinent to note that the…

Q: Kingbird Company acquired a plant asset at the beginning of Year 1. The asset has an estimated…

A: Double declining rate = 1/useful life*2

Q: A piece of equipment is purchased for $40,000 and has an estimated salvage value of $1,000 at the…

A: Purchase cost=40,000 Salvage value=1,000 Useful life=5 years Straight line method: Depreciation…

Q: cost of $63,616 has an estimated residual value of $5,755 and an estimated life of 4 years or 16,212…

A: In  units-of-activity method, depreciation expense is calculated on the basis of usage of units .…

Q: T-Mitch calculates and records depreciation using the straight line method. A piece of machinery was…

A: Depreciation  Expense: Depreciation expense is that expenses which is charge on Assets  every year…

Q: s part of a major renovation at the beginning of the year, Atiase Pharmaceuticals, Incorporated,…

A: Depreciation is being charged on fixed assets in order to record reduction in value over the period…

Q: The first audit of the books of Swift Limited was recently carried out for the year ended December…

A: Correct Journal Entry :— Whenever wrong jeneral entry is passed in books of account due to any type…

Q: Copy equipment was acquired at the beginning of the year at a cost of $25,200 that has an estimated…

A: Depreciation is the decrement in the value of tangible assets by the wear and tear during the…

Q: The first audit of the books of Concord Company was made for the year ended December 31, 2021. In…

A: An audit seems to be the study or review of multiple accounting records by an auditor, accompanied…

Q: Computer equipment was acquired at the beginning of the year at a cost of $57,500 that has an…

A: The objective of the question is to calculate the depreciable cost, the double-declining-balance…

Q: A storage tank acquired at the beginning of the fiscal year at a cost of $172,000 has an estimated…

A: Depreciation is the allocation of cost of the asset over the useful life of the asset.

Q: Perform the following fixed asset transaction exercises. 1. Read the following case and make the…

A: Double declining balance method This is a method of accelerated depreciation that doubles the normal…

Q: Waterway Company acquired a plant asset at the beginning of Year 1. The asset has an estimated…

A: Double-declining-balance method: The depreciation method which assumes that the consumption of…

Q: 1. At the beginning of 2024, the company purchased a machine for $483,000 (salvage value of $48,300)…

A: A journal entry is a basic accounting record that is used to chronologically track financial…

Q: Trinkle Company, Incorporated made several purchases of long-term assets in Year 1. The details of…

A: Please see explanation and computations below for reference.

Q: Sellers Construction Company purchased a compressor for $104,300 cash. It had an estimated useful…

A: Every transaction which is of financial nature affects two or more sides of an accounting equation.…

Q: Equipment was acquired at the beginning of the year at a cost of $600,000. The equipment was…

A: Depreciation Expense - Depreciation Expense is an Expense charged on the fixed assets of the…

Q: A storage tank acquired at the beginning of the fiscal year at a cost of $104,400 has an estimated…

A: The objective of the question is to calculate the annual depreciation of a storage tank using two…

Q: Computer equipment was acquired at the beginning of the year at a cost of $48,125 that has an…

A: Depreciation is a reduction in the value of assets due to the usage of that asset. We can evaluate…

Q: Equipment with a cost of $149,390.00 has an estimated residual value of $8,651.00 and an estimated…

A: Given: It is to be depreciated by the straight-line method.   Straight-line Depreciation = (Original…

Q: A storage tank acquired at the beginning of the fiscal year at a cost of $61,000 has an estimated…

A: Formulas: Depreciation = ( Cost of asset - Salvage value) / Life of the asset

Q: You are performing a reconstruction analysis for equipment transactions during the year. You are…

A: Depreciation expense for the year = Ending Accumulated depreciation + Accumulated depreciation on…

Q: Equipment with a cost of $477400 has an estimated salvage value of $55000 and an estimated life of 4…

A: Depreciation is the way of allocating the cost of the assets over the life of the asset, it can be…

Q: Select the necessary words from the list of possibilities to complete the following statements.…

A: Net income :— It is revenue minus expenses.  Subsidiary ledger :— It is the list of accounts of…

Q: Non-current assets are being audited and the following factors have been discovered: Motor vehicles…

A: An asset is impaired if its extended future incomes are not as much as its current conveying esteem.…

Q: The first audit of the books of Ayayai Company was made for the year ended December 31, 2021. In…

A: SOLUTION-   WORKING NOTE- INCORRECT DEPRECIATION CALCULATED FOR 3 YEARS  (468000 *3 /6) 234000…

Q: As the recently appointed auditor for Cheyenne Corporation, you have been asked to examine selected…

A: Journal Entry is the primary step in recording the transactions in the books of accounts.The…

Q: Sellers Construction Company purchased a compressor for $110,200 cash. It had an estimated useful…

A: As per the concept of accounting, the assets are equal to the sum of the liabilities and…

Q: Computer equipment was acquired at the beginning of the year at a cost of $69,375 that has an…

A: Depreciation Expense is an expense incurred on the fixed assets of the company. it is charged due to…

Q: (Error Correction Entries) The first audit of the books of Bruce Gingrich Company was made for the…

A: Journal entry:   Journal entry is a set of economic events which can be measured in monetary terms.…

Q: Copy equipment was acquired at the beginning of the year at a cost of $62,460 that has an estimated…

A: Units of activity method: Under units-of-activity method, depreciation is computed based on the…

Q: Computer equipment was acquired at the beginning of the year at a cost of $55,699.00. The computer…

A: Depreciation under straight line method   =( Cost of assets- Residual value)/ useful life of assets…

Q: Equipment was acquired at the beginning of the year at a cost of $537,500. The equipment was…

A: Year Book value Depreciation Accumulated Depreciation Book value 1 $537,500 $119,444.4444 $119,444…

Q: New lithographic equipment, acquired at a cost of $905,600 on March 1 at the beginning of a fiscal…

A: The question is based on the concept of Depreciation Accounting.

Q: Depletion: Calculating and Journalizing 1. Calculate the amount of depletion expense for both years.…

A: The depreciation expense is charged on the fixed assets as reduction in the value of the fixed…

Q: Equipment with a cost of $148,767.00 has an estimated residual value of $8,167.00 and an estimated…

A: There are different types of depreciation methods In this question, it has to be depreciation using…

Q: New tire retreading equipment, acquired at a cost of $110,000 on September 1 of Year 1 (beginning of…

A: Compute the depreciation:

Q: Oriole Company acquired a plant asset at the beginning of Year 1. The asset has an estimated service…

A: Depreciation : It is the non cash expenses and it is charged on fixed assets of the organisation.

Audit Procedures

Audit Procedures are methods and techniques performed by the auditor to determine the quality of financial information of clients, thereby expressing an opinion on true & fair view of financial statements and entity position. They are identified and applied at the planning stage of audit after determining audit objectives, scope, approach, and risk assessment.