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- Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assets life, and create the journal entry for year five.Problem 26-15 (IAA) During the current year, Sacrosanct Company purchased a second-hand machine at a price of P3,200,000. A cash payment of P500,000 was made and a two-year, noninterest bearing note was issued for the balance. Recent transactions involving similar machinery indicate that the used machine has a fair value of P2,400,000. A new machine would cost P4,000,000. The following costs were incurred during the year: 30,000 Cost of removing old machine that is replaced Cash proceeds from sale of the old machine replaced General overhaul and repairs to recondition machine prior to use Cost of spare parts to cover breakdowns Cost of installation Cost of testing machine prior to use Cost of hauling machine from vendor to entity premises Cost of repairing damage to machine caused when machine was dropped during installation 30,000 Repairs incurred during first year of operations Safety device added to the machine Cost of training workers to operate the machine 10,000 150,000 200,000…During the current year, Adrienne Company purchased a second hand machine at a price of P5,000,000. A cash payment of P1,000,000 was made and a two-year, noninterest bearing note was issued for the balance of P4,000,000. Recent transactions involving similar machine indicate that the used machine has a second hand market value of P4,500,000. A new machine would cost of P6,500,000. The following costs were incurred during the year. Cost of removing old machine that is replaced Cash proceeds from the sale of the old machine replaced General overhaul and repairs to recondition machine prior to use Cost of spare parts to cover breakdown 350,000 100,000 220,000 80,000 Cost of installation 180,000 Cost of testing machine prior to use Cost of hauling the machine from vendor to entity premises Cost of repairing damage to machine caused when the machine was dropped during installation 150,000 40,000 50,000 Repairs incurred during the first year of operation Safety device added to the machine…
- During the current year, Benguet Company purchased a secondhand machine at a price of P300,000. A cash down payment of P50,000 was made and a two-year, non interest bearing note was issued for the balance. Recent transactions involving similar machinery indicate that the used machine has a secondhand market value of P240,000. A new machine would cost P400,000. The following costs were incurred on the machine during the year: Cost of removing the old machine 2,000Cash proceeds form the sale of the old machine 1,200Cost of spare parts purchased and set aside from breakdowns during the first two years of normal use of the machine 20,000Cost of labor to install the machine 4,000Cost of testing the machine prior to use 1,800Cost of hauling the machine from the vendor’s place of business to the company’s premises 5,000Cost of repairing the damage to the machine when it was dropped during the installation 3,000Repairs incurred during the first year of operations 6,000Safety devices added to…Current Attempt in Progress Waterway Company purchased equipment on January 1 at a list price of $121500, with credit terms 2/10, n/30. Payment was made within the discount period and Waterway was given a $2430 cash discount. Waterway paid $6400 sales tax on the equipment, and paid installation charges of $1760. Prior to installation, Waterway paid $3600 to pour a concrete slab on which to place the equipment. What is the total cost of the new equipment? O $133260 O $127230 O $130830 O $125470During the current year, Polly Company purchased a second hand machine at a price of P5,000,000. A cash payment of P1,000,000 was made and a two-year, non-interest bearing note was issued for the balance of P4,000,000. Recent transactions involving similar machine indicate that the used machine has a second hand market value of P3,800,000. A new machine would cost P6,500,000. The following costs were incurred during the year: Cost of removing old machine that is replaced Cash proceeds from the sale of the old machine replaced General overhaul and repairs to recondition machine prior to use Cost of spare parts to cover breakdowns Cost of installation Cost of testing machine prior to use Cost of hauling the machine from vendor to company premises Cost of repairing damage to machine caused when the machine was dropped during installation Repairs incurred during the first year of operation Safety device added to the machine Cost of training workers to operate the machine What amount should…
- a. A patent purchased this year from Miller Co. on January 1 for a cash cost of $1,600. When purchased, the patent had an estimated life of 8 years. b. A trademark was registered with the federal government for $10,000. Management estimated that the trademark could be worth as much as $240,000 because it has an indefinite life. c. Computer licensing rights were purchased this year on January 1 for $42,000. The rights are expected to have a six-year useful life to the company. Required: 1. Compute the acquisition cost of each intangible asset. 2. Compute the amortization of each intangible for the current year ended December 31. 3. Show how these assets and any related expenses should be reported on the balance sheet and income statement for the current year. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Compute the amortization of each intangible for the current year ended December 31. (Do not round intermediate calculations.) Amortization…Instructions Springfield Corporation purchases a new machine on March 3, 20X4 for $62,300 in cash. It pays an additional $2,500 to transport and set up the machine. Springfield's accountant determines that the equipment has no residual value and that the useful life is five years. It is expected to generate 2,900,000 units during its life. Assume Springfield employs the half-year convention. 1. Record the purchase of the machine. 2. Assume that Springfield uses the straight-line method of depreciation. Record depreciation expense for the first two years of the machine's life. 3. Assume that Springfield uses the double-declining balance method of depreciation. Record depreciation expense for the first two years of the machine's life. 4. Assume that Springfield uses the units-of-production method of depreciation. During Year 1, the machine produces 600,000 units. During Year 2, the machine produces 578,000 units. Record depreciation expense for the first two years of the machine's life.…1 of nd Problem 27-1 (IAA) Amicable Company purchased a machine at a cost of P635,000 January 1, 2020. It was estimated that the machine would I have a residual value of P35,000. on The estimated useful life is 5 years, 60,000 service hours and 150,000 production units. Actual operations Service hours Unit produced 2020 14,000 34,000 2021 13,000 32,000 2022 10,000 25,000 2023 11,000 29,000 2024 12,000 30,000 Required: Prepare a depreciation table for the following methods: a. Straight line b. Service hours c. Production method 472 Problem 27-2 (IAA) Austere Company purchased machinery for P570,000 on July 1, 2020. It is estimated that it will have a useful life of 10 years, residual value of P20,000, production of 200,000 units and working hours of 50,000. The entity used the machinery for 3,000 hours in 2020 and 5,000 hours in 2021. The machinery produced 18,000 units in 2020 and 22,000 units in 2021. Required: Compute depreciation for 2020 and 2021: a. Straight line b. Working hours…
- Question1 On 09/01/X1, the company Purinos García, S.A., acquires a machine for €425,000. The machine carries a discount of €50,000. Half is paid in cash and the other half on 11/30/X2. The useful life of the machine is 10 years, the residual value of €1,800 and the linear amortization. Transport costs are €800 and installation costs €1,100, which are paid in cash. In addition, it is estimated that dismantling costs at the end of the useful life will amount to €6,700 -with a discount rate of 1.5%. At the end of the X1 financial year, the fair value of the machine is €350,000, the cost of sale is €8,000 and the value in use is €342,586. Finally, the machine is sold at the end of December of the X2 for a value of €108,000 in cash. It is also known that VAT is 21%. It is requested to record the following operations: Acquisition of the asset. Amortization at the end of X1. Deterioration at the end of X1 if applicable. Reclassification of the pending payment of the machinery. Payment of…Intangible Assets: Computer Software SE8. Satyam Company has created a new software application for PCs. Its costs dur- ing research and development were $500,000. Its costs after the working program was developed were $350,000. Although the company's copyright may be amortized over 40 years, management believes that the product will be viable for only 5 years. How should the costs be accounted for? At what value will the software appear on the balance sheet after 1 year?Ace Company buys a machine on April 1, Year One, for $50,000 in cash. It has a residual value of $10,000 and an expected useful life of ten years. The straight-line method and the half-year convention are applied. The asset is sold on September 1, Year Three, for $39,900. What loss should be reported on this sale? a. $100 loss b. $850 loss c. $1,767 loss d. $2,100 loss