INTERMEDIATE ACCOUNTING (LL) W/CONNECT
9th Edition
ISBN: 9781260679694
Author: SPICELAND
Publisher: MCG
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Chapter 20, Problem 20.17E
Change in estimate; useful life and residual value of equipment
• LO20–4
Wardell Company purchased a mini computer on January 1, 2016, at a cost of $40,000. The computer has been
Required:
1. Prepare the appropriate
2. Repeat requirement 1, assuming that the company uses the sum-of-the-years’-digits method instead of the straight-line method.
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Exercise 11-23 (Algo) Change in estimate; useful life and residual value of equipment [LO11-2, 11-5]
[The following information applies to the questions displayed below.]
Wardell Company purchased a mainframe on January 1, 2019, at a cost of $43,000. The computer was depreciated using
the straight-line method over an estimated five-year life with an estimated residual value of $10,000. On January 1, 2021,
the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $1,600.
Exercise 11-23 (Algo) Part 2
2. Prepare the year-end journal entry for depreciation in 2021. Assume that the company uses the sum-of-the-years' -digits method
instead of the straight-line method. (If no entry is required for a transaction/event, select "No journal entry required" in the first
account field. Do not round intermediate calculations. Round your final answers to nearest whole dollar.)
View transaction list
Journal entry worksheet
<
1
Record depreciation…
Required information
Exercise 11-23 (Algo) Change in estimate; useful life and residual value of equipment [LO11-2, 11-5]
[The following information applies to the questions displayed below.]
Wardell Company purchased a minicomputer on January 1, 2022, at a cost of $54,000. The computer was depreciated
using the straight-line method over an estimated five-year life with an estimated residual value of $6,000. On January 1,
2024, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to
$3,600.
Exercise 11-23 (Algo) Part 1
4
Required:
1. Prepare the year-end journal entry for depreciation on December 31, 2024. No depreciation was recorded during the year.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final
answers to nearest whole dollar.
Problem 4
The following information pertains to Bosh Inc.'s depreciable assets:
• Machine Y cost P525,000 and was acquired on January 1, 2016. On the acquisition date, the
expected useful life was 12 years with no residual value. The straight line method was used. On
January 1, 2020, it was estimated that the remaining life of the asset would be 4 years and that
there would be a P25,000 residual value.
• A building was purchased on January 1, 2017 for P3,000,000. The building was expected to have
a useful life of 20 years with no residual value. The straight line depreciation method was used.
On January 1, 2020, a change was made to the sum-of-the-years'-digits method of depreciation.
No change was made to the estimated useful life and residual value of the building.
_3. What is the depreciation expense of Machine Y for 2020?
_4. What is the depreciation expense of building for 2022?
Chapter 20 Solutions
INTERMEDIATE ACCOUNTING (LL) W/CONNECT
Ch. 20 - Prob. 20.1QCh. 20 - There are three basic accounting approaches to...Ch. 20 - Prob. 20.3QCh. 20 - Lynch Corporation changes from the...Ch. 20 - Sugarbaker Designs Inc. changed from the FIFO...Ch. 20 - Most changes in accounting principles are recorded...Ch. 20 - Southeast Steel, Inc., changed from the FIFO...Ch. 20 - Prob. 20.8QCh. 20 - Its not easy sometimes to distinguish between a...Ch. 20 - For financial reporting, a reporting entity can be...
Ch. 20 - Prob. 20.11QCh. 20 - Describe the process of correcting an error when...Ch. 20 - Prob. 20.13QCh. 20 - If it is discovered that an extraordinary repair...Ch. 20 - Prob. 20.15QCh. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in inventory methods; average cost method...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in depreciation methods LO203 Irwin, Inc.,...Ch. 20 - Prob. 20.5BECh. 20 - Book royalties LO204 Three programmers at Feenix...Ch. 20 - Warranty expense LO204 In 2017, Quapau Products...Ch. 20 - Change in estimate; useful life of patent LO204...Ch. 20 - Prob. 20.9BECh. 20 - Error correction LO206 In 2018, internal auditors...Ch. 20 - Prob. 20.11BECh. 20 - Error correction LO206 In 2018, the internal...Ch. 20 - Change in principle; change in inventory methods ...Ch. 20 - Change in principle; change in inventory methods ...Ch. 20 - Change from the treasury stock method to retired...Ch. 20 - Change in principle; change to the equity method ...Ch. 20 - Prob. 20.5ECh. 20 - FASB codification research LO202 Access the FASB...Ch. 20 - Change in principle; change in inventory cost...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in depreciation methods LO203 For...Ch. 20 - Change in depreciation methods LO203 The Canliss...Ch. 20 - Book royalties LO204 Dreighton Engineering Group...Ch. 20 - Loss contingency LO204 The Commonwealth of...Ch. 20 - Warranty expense LO204 Woodmier Lawn Products...Ch. 20 - Prob. 20.15ECh. 20 - Accounting change LO204 The Peridot Company...Ch. 20 - Change in estimate; useful life and residual value...Ch. 20 - Classifying accounting changes LO201 through...Ch. 20 - Error correction; inventory error LO206 During...Ch. 20 - Error corrections; investment LO206 Required: 1....Ch. 20 - Prob. 20.21ECh. 20 - Prob. 20.22ECh. 20 - Prob. 20.23ECh. 20 - Inventory errors LO206 Indicate with the...Ch. 20 - Classifying accounting changes and errors LO201...Ch. 20 - Change in inventory costing methods; comparative...Ch. 20 - P 20-2 Change in principle; change in method of...Ch. 20 - Change in inventory costing methods; comparative...Ch. 20 - Change in inventory methods LO202 The Rockwell...Ch. 20 - Change in inventory methods LO202 Fantasy...Ch. 20 - Change in principle; change in depreciation...Ch. 20 - Depletion; change in estimate LO204 In 2018, the...Ch. 20 - Accounting changes; six situations LO201, LO203,...Ch. 20 - Prob. 20.9PCh. 20 - Inventory errors LO206 You have been hired as the...Ch. 20 - Error correction; change in depreciation method ...Ch. 20 - Accounting changes and error correction; seven...Ch. 20 - Prob. 20.13PCh. 20 - Prob. 20.14PCh. 20 - Prob. 20.15PCh. 20 - Prob. 20.16PCh. 20 - Prob. 20.17PCh. 20 - Integrating Case 201 Change to dollar-value LIFO ...Ch. 20 - Prob. 20.2BYPCh. 20 - Prob. 20.3BYPCh. 20 - Analysis Case 204 Change in inventory methods;...Ch. 20 - Prob. 20.5BYPCh. 20 - Prob. 20.6BYPCh. 20 - Analysis Case 208 Various changes LO201 through...Ch. 20 - Analysis Case 209 Various changes LO201 through...Ch. 20 - Prob. 20.10BYPCh. 20 - Prob. 20.11BYPCh. 20 - Prob. 20.12BYPCh. 20 - Prob. 1CCTC
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- Please do not give solution in image format thankuarrow_forwardExercise 11-11 (Algo) Disposal of property, plant, and equipment; partial periods [LO11-2] On July 1, 2016, Farm Fresh Industries purchased a specialized delivery truck for $131,600. At the time, Farm Fresh estimated the truck to have a useful life of eight years and a residual value of $26,000. On March 1, 2021, the truck was sold for $52,000. Farm Fresh uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service. Required: 1. Prepare the journal entry to update depreciation in 2021. 2. Prepare the journal entry to record the sale of the truck. 3. Assuming that the truck was instead sold for $83,000, prepare the journal entry to record the sale. Complete this question by entering your answers in the tabs below. Req 1 and 2 Prepare the journal entries to update depreciation in 2021 and record the sale of the truck. (If no entry is required for a transaction/event, select "No…arrow_forwardPlease do not give solution in image format thankuarrow_forward
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