equipment acquired on January 1, 2018 at a cost of P2,200,000 with 20 years estimated useful life. On December 31, 2022, the fair value of the equipment is P1,800,000, and revised useful life of 15 years. Round off percentage to whole number and the gross up value to nearest peso if you are required to gross up. The carrying value of the equipment 2 years after revaluation is

equipment acquired on January 1, 2018 at a cost of P2,200,000 with 20 years estimated useful life. On December 31, 2022, the fair value of the equipment is P1,800,000, and revised useful life of 15 years. Round off percentage to whole number and the gross up value to nearest peso if you are required to gross up. The carrying value of the equipment 2 years after revaluation is

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

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 10MC: On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring...

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On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring payments of 10,000 at the beginning of each year. The machine cost 40,000 and has a useful life of 8 years with no residual value. Kerns implicit interest rate is 10%, and present value factors are as follows: Present value for an annuity due of 1 at 10% for 6 periods4.791 Present value for an annuity due of 1 at 10% for 8 periods5.868 Kern appropriately recorded the lease as a sales-type lease. At the inception of the lease, the Lease Receivable account balance should be: a. 60,000 b. 58,680 c. 48,000 d. 47,910
For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a seventeen-year remaining legal life was purchased for $850,000. The patent will be usable for another six years. B. A patent was acquired on a new tablet. The cost of the patent itself was only $12,000, but the market value of the patent is $150,000. The company expects to be able to use this patent for all twenty years of its life.
On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.
For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a ten-year remaining legal life was purchased for $300,000. The patent will be usable for another eight years. B. A patent was acquired on a new smartphone. The cost of the patent itself was only $24,000, but the market value of the patent is $600,000. The company expects to be able to use this patent for all twenty years of its life.
Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual value was 500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: 1. Compute depredation expense (rounded to the nearest dollar) for 2019 and 2020 using the: a. straight-line method b. sum-of-the-years-digits method c. double-declining-balance method 2. Next Level Which method produces the highest book value at the end of 2020? 3. Next Level Which method produces the highest charge to income in 2020? 4. Next Level Over the life of the asset, which method produces the greatest amount of depreciation expense?
At the beginning of 2020, Holden Companys controller asked you to prepare correcting entries for the following three situations: 1. Machine X was purchased for 100,000 on January 1, 2015. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 45,000. The estimated residual value remains at 10,000, but the service life is now estimated to be 1 year longer than originally estimated. 2. Machine Y was purchased for 40,000 on January 1, 2018. It had an estimated residual value of 4,000 and an estimated service life of 8 years. It has been depreciated under the sum-of-the-years-digits method for 2 years. Now, the company has decided to change to the straight-line method. 3. Machine Z was purchased for 80,000 on January 1, 2019. Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value is 8,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry for each situation to record the depreciation for 2020. Ignore income taxes.
ABC Company has an equipment acquired on January 1, 2018 at a cost of P2,200,000 with estimated residual value of P200,000 and 20 years estimated useful life. On December 31, 2021, the replacement cost of the equipment is P2,400,000. Two years after, the depreciated replacement cost has declined to 1,470,000. Round off percentage to whole number and gross-up value to the nearest peso if you are required to gross up. On December 31, 2024, the equipment’s carrying value is
in 5 minutes ABC Company has an equipment acquired on January 1, 2018 at a cost of P2,200,000 with estimated residual value of P200,000 and 20 years estimated useful life. On December 31, 2021, the replacement cost of the equipment turned P2,500,000 and the revised useful life is 24 years. Round off percentage to whole number and to nearest peso if you are required to gross up. Assuming the equipment is sold on January 1, 2024 for P1,800,000, determine the total impact to retained earnings of the equity section because of the transaction. (indicate the word increase or decrease after the amount such as this 100,000 increase)
On July 1, 2020, FDN Company purchased an equipment for P47,100,000. After 5 years of its estimated useful life, it can be sold for P100,000. How much is the carrying amount of the equipment as of December 31, 2021?
On March 1, 2020, Tebow Company purchased a patent for $158,000 cash. Although the patent gives legal protection for 19 years, the patent will be used for only 2 years. Assume straight-line amortization. Amortization per unit (Cost Res. Value)/Time = Amortization per year Amortization per year X portion of year = Amortization Journalize a) the purchase of the patent, and b) the amortization expense of the patent as of December 31, 2020. Date a b Check All Parts Description Debit Credit
Duval Industries purchases $110,000 of machinery on January 1, 2020. The machinery is expected to have a 5 year useful life and a residual value of $10,000. On January 1, 2023, management determines that the equipment will last for an additional 2 years and the new residual value is $6,000. Duval uses straight-line depreciation and has a calendar year end. Instructions Calculate the carrying value of the machinery on December 31, 2023. (place answer without $ sign in space below) 신
An asset was acquired on January 1, 2020 for P800,000 and is expected to have a 5-year useful life. The straight-line method was used. On January 1, 2022, the asset was deemed to have a sound value of P720,000. 1. How much is the revaluation surplus for the period ended December 31, 2022? 2. The replacement cost of the asset at January 1, 2022 is?