Intermediate Accounting, Student Value Edition (2nd Edition)
2nd Edition
ISBN: 9780134732145
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Chapter 21, Problem 21.9BE
To determine
To Prepare: The
Given Information:
Cumulative depreciation would have been $345,000 lower in case of straight-line method.
Depreciation expense as per the straight-line method is $30,000.
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(Error and Change in Estimate—Depreciation) Joy Cunningham Co. purchased a machine on January 1, 2015, for $550,000. At that time, it was estimated that the machine would have a 10-year life and no salvage value. On December 31, 2018, the firm’s accountant found that the entry for depreciation expense had been omitted in 2016. In addition, management has informed the accountant that the company plans to switch to straight-line depreciation, starting with the year 2018. At present, the company uses the sum-of-the-years’-digits method for depreciating equipment.InstructionsPrepare the general journal entries that should be made at December 31, 2018, to record these events. (Ignore tax effects.)
What is the solution and/or answer to this problem?
Depreciation by Two Methods; Sale of Fixed Asset
New lithographic equipment, acquired at a cost of $718,750 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $61,800. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year.
On March 4 of Year 5, the equipment was sold for $105,300.
Required:
1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods:
a. Straight-line method
Year
DepreciationExpense
Accumulated Depreciation,End of Year
Book Value,End of Year
1
$fill in the blank ae7e56f7b05f016_1
$fill in the blank ae7e56f7b05f016_2
$fill in the blank ae7e56f7b05f016_3
2
$fill in the blank…
Dengar
Chapter 21 Solutions
Intermediate Accounting, Student Value Edition (2nd Edition)
Ch. 21 - Are accounting changes permitted in financial...Ch. 21 - How do firms report accounting changes under the...Ch. 21 - Prob. 21.3QCh. 21 - How do firms account for changes in accounting...Ch. 21 - Prob. 21.5QCh. 21 - Prob. 21.6QCh. 21 - Prob. 21.7QCh. 21 - Prob. 21.8QCh. 21 - Do accounting errors that self-correct within two...Ch. 21 - Does a firm need to correct an error that...
Ch. 21 - Prob. 21.1MCCh. 21 - Prob. 21.2MCCh. 21 - Prob. 21.3MCCh. 21 - Prob. 21.4MCCh. 21 - Prob. 21.5MCCh. 21 - Prob. 21.1BECh. 21 - Prob. 21.2BECh. 21 - Prob. 21.3BECh. 21 - Prob. 21.4BECh. 21 - Change in Accounting Principle, Long-Term...Ch. 21 - Prob. 21.6BECh. 21 - Prob. 21.7BECh. 21 - Prob. 21.8BECh. 21 - Prob. 21.9BECh. 21 - Prob. 21.10BECh. 21 - Prob. 21.11BECh. 21 - Prob. 21.12BECh. 21 - Prob. 21.13BECh. 21 - Prob. 21.14BECh. 21 - Change in Accounting Principle, Inventory. Massi...Ch. 21 - Change in Accounting Principle, Long-Term...Ch. 21 - Prob. 21.3ECh. 21 - Change in Accounting Principle, Inventory. Winthur...Ch. 21 - Prob. 21.5ECh. 21 - Prob. 21.6ECh. 21 - Error Analysis and Correction. Feinstein and...Ch. 21 - Prob. 21.8ECh. 21 - Prob. 21.9ECh. 21 - Prob. 21.10ECh. 21 - Change in Accounting Principle, Inventory. Second...Ch. 21 - Prob. 21.2PCh. 21 - Prob. 21.3PCh. 21 - Prob. 21.4PCh. 21 - Prob. 21.5PCh. 21 - Change in Estimate, Inventory, Bad Debt Expense....Ch. 21 - Prob. 21.7PCh. 21 - Cases Judgment Case Judgment Case: Materiality and...Ch. 21 - Prob. 1FSCCh. 21 - Surfing the Standards: Change in Accounting...Ch. 21 - Prob. 1BCC
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- Hi what is the solution to this problem? please 2. PR.10-04.ALGO Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of $843,750 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $72,600. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On March 4 of Year 5, the equipment was sold for $123,600. Required: 1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods: a. Straight-line method Year DepreciationExpense Accumulated Depreciation,End of Year Book Value,End of Year 1 $fill in the blank 7576dbf1f067fc1_1 $fill in the blank 7576dbf1f067fc1_2 $fill in the blank 7576dbf1f067fc1_3 2 $fill in the…arrow_forwardOn December 31, Strike Company has decided to discard one of its batting cages. The equipment had an initial cost of $209,525 and has accumulated depreciation of $188,572.50. Depreciation has been recorded up to the end of the year. Which of the following will be included in the entry to record the disposal? a.Accumulated Depreciation, debit, $209,525 b.Gain on Disposal of Asset, credit, $20,952.50 c.Loss on Disposal of Asset, debit, $188,572.50 d.Equipment, credit, $209,525arrow_forwardOn December 31, Strike Company has decided to discard one of its batting cages. The equipment had an initial cost of $206,400 and has accumulated depreciation of $185,760. Depreciation has been recorded up to the end of the year. Which of the following will be included in the entry to record the disposal? a.Equipment, credit, $206,400 b.Gain on Disposal of Asset, credit, $20,640 c.Accumulated Depreciation, debit, $206,400 d.Loss on Disposal of Asset, debit, $185,760arrow_forward
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