Connect Access Card for Financial Accounting
9th Edition
ISBN: 9781259738678
Author: Robert Libby, Patricia Libby, Frank Hodge Ch
Publisher: McGraw-Hill Education
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Chapter 8, Problem 8.23E
(Chapter Supplement) Recording a Change in Estimate
LO8-3 Refer to E8-7.
Required:
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The following information is available about Company DEF's depreciable assets on January 1, 2019
(numbers are in € millions):
Original Cost
€ 50,000
Depreciable Base
€ 47,500
Accumulated Depreciation (1/1/2019)
€ 28,500
Depreciable Life
10 years
An analyst believes that the above described estimates do not reflect the underlying economic
depreciation of Company DEF's assets. As a result, the analyst wants to adjust Company DEF's
financial statements based on his own estimates. While the analyst assumes that the residual value
assumption of Company DEF is correct, the analyst adjusts the depreciable life of the asset. In
adjusting the financial statements of Company DEF, the analyst decreases the 1/1/2019
accumulated depreciation by €10687.5.
What is the depreciable life (in years) that the analyst uses in adjusting Company DEF's financial
statements?
Please do not give image format
Please answer the required part which is to prepare all indicated journal entries for 2020 and 2021. Please put the computations if needed. Thank you
Chapter 8 Solutions
Connect Access Card for Financial Accounting
Ch. 8 - Define long-lived assets. Why are they considered...Ch. 8 - Prob. 2QCh. 8 - What are the classifications of long-lived assets?...Ch. 8 - Prob. 4QCh. 8 - Describe the relationship between the expense...Ch. 8 - Prob. 6QCh. 8 - Prob. 7QCh. 8 - In computing depreciation, three values must be...Ch. 8 - The estimated useful life and residual value of a...Ch. 8 - Prob. 10Q
Ch. 8 - Prob. 11QCh. 8 - Prob. 12QCh. 8 - Prob. 13QCh. 8 - Prob. 14QCh. 8 - Prob. 15QCh. 8 - Why is depreciation expense added to net income...Ch. 8 - Miga Company and Porter Company both bought a new...Ch. 8 - Leslie, Inc.. followed the practice of...Ch. 8 - Prob. 3MCQCh. 8 - Prob. 4MCQCh. 8 - Prob. 5MCQCh. 8 - Prob. 6MCQCh. 8 - Prob. 7MCQCh. 8 - Prob. 8MCQCh. 8 - Prob. 9MCQCh. 8 - (Chapter Supplement) Irish Industries purchased a...Ch. 8 - Prob. 8.1MECh. 8 - Prob. 8.2MECh. 8 - Prob. 8.3MECh. 8 - Prob. 8.4MECh. 8 - Computing Book Value (Double-Declining-Balance...Ch. 8 - Computing Book Value (Units-of-Production...Ch. 8 - Identifying Asset Impairment LO8-4 For each of the...Ch. 8 - Prob. 8.8MECh. 8 - Prob. 8.9MECh. 8 - Prob. 8.10MECh. 8 - Prob. 8.1ECh. 8 - Prob. 8.2ECh. 8 - Computing and Recording Cost and Depreciation of...Ch. 8 - Determining Financial Statement Effects of an...Ch. 8 - Determining Financial Statement Effects of an...Ch. 8 - Recording Depreciation and Repairs (Straight-Line...Ch. 8 - Prob. 8.7ECh. 8 - Prob. 8.8ECh. 8 - Computing Depreciation under Alternative Methods...Ch. 8 - Computing Depreciation under Alternative Methods...Ch. 8 - Prob. 8.11ECh. 8 - Prob. 8.12ECh. 8 - Prob. 8.13ECh. 8 - Computing Depreciation and Book Value for Two...Ch. 8 - Prob. 8.15ECh. 8 - Recording the Disposal of an Asset at Three...Ch. 8 - Prob. 8.17ECh. 8 - Prob. 8.18ECh. 8 - Prob. 8.19ECh. 8 - Prob. 8.20ECh. 8 - Prob. 8.21ECh. 8 - Prob. 8.22ECh. 8 - (Chapter Supplement) Recording a Change in...Ch. 8 - Prob. 8.24ECh. 8 - Prob. 8.25ECh. 8 - Explaining the Nature of a Long-Lived Asset and...Ch. 8 - Analyzing the Effects of Repairs, an Addition, and...Ch. 8 - Prob. 8.3PCh. 8 - Best Buy Co., Inc., headquartered in Richfield,...Ch. 8 - Evaluating the Effect of Alternative Depreciation...Ch. 8 - Recording and Interpreting the Disposal of Three...Ch. 8 - Prob. 8.7PCh. 8 - Prob. 8.8PCh. 8 - Computing Goodwill from the Purchase of a Business...Ch. 8 - Prob. 8.10PCh. 8 - Prob. 8.11PCh. 8 - Explaining the Nature of a Long-Lived Asset and...Ch. 8 - Prob. 8.2APCh. 8 - Computing the Acquisition Cost and Recording...Ch. 8 - Prob. 8.4APCh. 8 - Recording and Interpreting the Disposal of Three...Ch. 8 - Prob. 8.6APCh. 8 - Prob. 8.7APCh. 8 - Asset Acquisition, Depreciation, and Disposal Pool...Ch. 8 - Case A. Dr Pepper Snapple Croup, Inc., is a...Ch. 8 - Prob. 8.1BCOMPCh. 8 - Prob. 8.1CCOMPCh. 8 - Case D. Stewart Company reports the following...Ch. 8 - Case E. Matson Company purchased the following on...Ch. 8 - Prob. 8.1CPCh. 8 - Finding Financial Information LO8-1, 8-2, 8-6...Ch. 8 - Comparing Companies within an Industry Refer to...Ch. 8 - Prob. 8.4CPCh. 8 - Prob. 8.5CPCh. 8 - Prob. 8.6CPCh. 8 - Evaluating the Impact of Capitalized Interest on...
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- Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense for 2019 if the units-of-production method were used ( Note: Round your answer to the nearest dollar)? a. $179,400 b. $184,000 c. $218,400 d. $224,000arrow_forwardI need help with only question 11.4 that was given.arrow_forwardThe following tables shows a company's CAPEX forecast in each of the following years: Useful Life of New Assets (years) 15 15 15 Forecast Year 1234 5 Capex in $ Select one: O A. 2.5 OB. 0.5 O C. 1.0 O D. 1.5 52849 15 22 36 15 15 Assuming the use of the mid year convention, what would be the total depreciation expense in Year 1 of the forecast?arrow_forward
- Please do not give solution in image format thankuarrow_forwardHello, in the above question 3 on the change in policy on the depreciation why not calculate the depreciation expense for the year-end December 31, 2018, and 2019 which is 100,000 divided by 10 = 10,000 for 2 years = 20,000. Then subtract the 36,000 -20,000 = 16,000. Reverse the 12,800 which was booked using the double declining balance method. and record the correct amount to accumulated depreciation and depreciation expense.arrow_forwardIn 2024, it was discovered that Brandon Irons Metal works had debited expense for the full cost of an asset purchased on January 1, 2021. The cost was $12 million with no expected residual value. Its useful life was 5 years and straight-line depreciation is used by the company. The correcting entry assuming the error was discovered in 2024 before the adjusting and closing entries includes:arrow_forward
- Please answer the required part: Prepare all indicated journal entries for 2020 and 2021. Please answer it with complete solutions and explanations. Thank youarrow_forwardHahaaarrow_forwardE. Assume that at the beginning of the 2023 financial year, half of the reported cost of the PPE and half of the accumulated depreciation pertained to equipment acquired 1 year ago. Equipment is depreciated using the lower limit of the useful life range applicable to that class of PPE. Calculate the depreciation expense, accumulated depreciation and net book value for equipment for the financial year ended 2023. Answers to nearest whole number F. Assume that at the beginning of the 2023 financial year, 75% of the reported cost of the PPE and 40% of the accumulated depreciation pertained to equipment acquired 1 year ago. Equipment is depreciated using the double declining balance method based on the lower limit of the useful life range applicable to that class of PPE. Calculate the depreciation expense, accumulated depreciation and net book value for equipment for the financial year ended 2023. Answers to 2 decimal placesarrow_forward
- During 2019, White Company determined that machinery previously depreciated over a 7-year life had a total estimated useful life of only 5 years. An accounting change was made in 2019 to reflect the change in estimate. If the change had been made in 2018, accumulated depreciation at December 31, 2018, would have been 1,600,000 instead of 1,200,000. As a result of this change, the 2019 depreciation expense was 100,000 greater than it would have been if no change were made. Ignoring income tax considerations, what is the proper amount of the adjustment to Whites January 1, 2019, balance of retained earnings? a. 0 b. 100,000 c. 280,000 d. 400,000arrow_forwardThe following are independent errors: a. In January 2019, repair costs of 9,000 were debited to the Machinery account. At the beginning of 2019, the book value of the machinery was 100,000. No residual value is expected, the remaining estimated life is 10 years, and straight-line depreciation is used. b. All purchases of materials for construction contracts still in progress have been immediately expensed. It is discovered that the use of these materials was 10,000 during 2018 and 12,000 during 2019. c. Depreciation on manufacturing equipment has been excluded from manufacturing costs and treated as a period expense. During 2019, 40,000 of depreciation was accounted for in that manner. Production was 15,000 units during 2019, of which 3,000 remained in inventory at the end of the year. Assume there was no inventory at the beginning of 2019. Required: Prepare journal entries for the preceding errors discovered during 2020. Ignore income taxes.arrow_forwardRefer to the information for Cox Inc. above. What amount would Cox record as depreciation expense at December 31, 2020, if the double-declining-balance method were used? a. $187,200 b. $192,000 c. $195,200 d. $312, 000arrow_forward
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