In January 2017, installation costs of $6,000 on newmachinery were charged to Maintenance and RepairsExpense. Other costs of this machinery of $30,000 werecorrectly recorded and have been depreciated using thestraight-line method with an estimated life of 10 yearsand no salvage value. At December 31, 2018, it is decidedthat the machinery has a remaining useful life of 20 years,starting with January 1, 2018. What entry(ies) should bemade in 2018 to correctly record transactions related tomachinery, assuming the machinery has no salvage value?The books have not been closed for 2018 and depreciationexpense has not yet been recorded for 2018.

In January 2017, installation costs of $6,000 on newmachinery were charged to Maintenance and RepairsExpense. Other costs of this machinery of $30,000 werecorrectly recorded and have been depreciated using thestraight-line method with an estimated life of 10 yearsand no salvage value. At December 31, 2018, it is decidedthat the machinery has a remaining useful life of 20 years,starting with January 1, 2018. What entry(ies) should bemade in 2018 to correctly record transactions related tomachinery, assuming the machinery has no salvage value?The books have not been closed for 2018 and depreciationexpense has not yet been recorded for 2018.

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Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter10: Long-lived Tangible And Intangible Assets

Section: Chapter Questions

Problem 22E

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The 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.
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.
Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.
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Wan Company purchased a new machine on October 1, 2017, at a cost of $100,000. The company estimated that the machine has a salvage value of $4,000. The machine is expected to be used for 8-years. Instructions Compute the depreciationexpense under the straight-line method for 2017 and 2018, assuming a December 31 year-end (use comma in numbers, one thousand is 1,000, not 1000. NO decimal point, NO $ sign):
Marsh Corporation purchased a machine on July 1, 2012, for $1,250,000. The machine was estimated to have a useful life of 10 years with an estimated salvage value of $70,000. During 2015, it became apparent that the machine would become uneconomical after December 31, 2019, and that the machine's salvage value is now $0. Accumulated depreciation on this machine as of December 31, 2014, was $295,000. What should be the charge for depreciation in 2015 under generally accepted accounting principles? O $177,000 O $191,000 O $205,000 O $238,750
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A truck was acquired on July 1, 2018, at a cost of P216,000. The truck had a six-yearuseful life and an estimated salvage value of P24,000. The straight-line method ofdepreciation was used. On January 1, 2021, the truck was overhauled at a cost ofP20,000, which extended the useful life of the truck for an additional two years beyondthat originally estimated (salvage value is still estimated at P24,000). In computingdepreciation for annual adjustment purposes, expense is calculated for each month theasset is owned. Prepare the appropriate entries for January 1, 2021 and December 31,2021. Show supporting computations.
On January 1, 2017, Extensive Manufacturing purchased a machine for $780,000 that it expected to have a useful life of four years. The company estimated that the residual value of the machine was $60,000. Extensive Manufacturing used the machine for two years and sold it on January 1, 2019, for $150,000. As of December 31, 2018, the accumulated depreciation on the machine was $360,000. Read the requirements. 1. Calculate the gain or loss on the sale of the machinery. Extensive Manufacturing will record a of $ on the sale of the machinery.
On January 2, 2017, Greenwood Company purchased and placed in operation a machine estimated to have a 10-yearlife and no salvage value. The machine cost P600,000 and was depreciated on a straight-line basis. On December 27,2020, a P60,000 device that increased the machine's output by one fourth was added to the machine. The new devicemade no change in the machine's estimated life and salvage value. During the first week of January, 2024 the machinewas completely overhauled at a cost of P180,000. The overhaul added three additional years to the machine's estimatedlife but did not change its salvage value. Prepare entries in general form to record:a) the purchase of the machineb) the 2017 depreciationc) the addition of the new deviced) the 2021 depreciatione) overhauling of the machinef) the 2024 depreciation
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