The Bailand Company purchased a building for P 210,000 that had an estimated residual value of P10,000 and an estimated service life of 10 years. The company purchased the building four years ago and has used straight-line depreciation. At the beginning of the fifth year (before it records depreciation for the year), the following independent situations occur: The company estimates that the asset has eight years’ life remaining (for a total of 12 years). The company changes to the sum-of-the-years’-digits method. The company discovers that the estimated residual value has been ignored in the computation of the depreciation. Required: For each of the independent situations, prepare all the journal entries relating to the building for the fifth year. Ignore income taxes.
The Bailand Company purchased a building for P 210,000 that had an estimated residual value of P10,000 and an estimated service life of 10 years. The company purchased the building four years ago and has used straight-line depreciation. At the beginning of the fifth year (before it records depreciation for the year), the following independent situations occur: The company estimates that the asset has eight years’ life remaining (for a total of 12 years). The company changes to the sum-of-the-years’-digits method. The company discovers that the estimated residual value has been ignored in the computation of the depreciation. Required: For each of the independent situations, prepare all the journal entries relating to the building for the fifth year. Ignore income taxes.
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
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...
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The Bailand Company purchased a building for P 210,000 that had an estimated residual value of P10,000 and an estimated service life of 10 years. The company purchased the building four years ago and has used straight-line
- The company estimates that the asset has eight years’ life remaining (for a total of 12 years).
- The company changes to the sum-of-the-years’-digits method.
- The company discovers that the estimated residual value has been ignored in the computation of the depreciation.
Required:
For each of the independent situations, prepare all the
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