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is computed using the straight line method. i useful life of the equipment is five years with alue.

is computed using the straight line method. i useful life of the equipment is five years with alue.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ANSWER NUMBER 4 ONLY. THANK YOU

Easy Company acquired an equipment on January 1, 2021 for P5,000,000. C Sa 0g ith CamScanner Depreciation is computed using the straight line method The estimated useful life of the equipment is five years with no residual value. A specific price index applicable to the equipment was 150 on January 1, 2021 and 225 on December 31, 2021. 1. What amount of depreciation should be reported in the historical cost income statement for 2021? а. 1,000,000 b. 1,500,000 c. 1,125,000 d. 1,250,000 2. What amount of depreciation should be reported in the current cost income statement for 2021? а. 1,500,000 b. 1,250,000 с. 1,000,000 d. 2,500,000 3. What amount should be reported as realized holding gain on the equipment for 2021? 500,000 b. 250,000 300,000 а. с. d. 4. What amount should be reported as unrealized holding gain on the equipment for 2021? а. 1,250,000 b. 2,500,000 C. 2,000,000 CScamecoyith CamScanner
Transcribed Image Text:Easy Company acquired an equipment on January 1, 2021 for P5,000,000. C Sa 0g ith CamScanner Depreciation is computed using the straight line method The estimated useful life of the equipment is five years with no residual value. A specific price index applicable to the equipment was 150 on January 1, 2021 and 225 on December 31, 2021. 1. What amount of depreciation should be reported in the historical cost income statement for 2021? а. 1,000,000 b. 1,500,000 c. 1,125,000 d. 1,250,000 2. What amount of depreciation should be reported in the current cost income statement for 2021? а. 1,500,000 b. 1,250,000 с. 1,000,000 d. 2,500,000 3. What amount should be reported as realized holding gain on the equipment for 2021? 500,000 b. 250,000 300,000 а. с. d. 4. What amount should be reported as unrealized holding gain on the equipment for 2021? а. 1,250,000 b. 2,500,000 C. 2,000,000 CScamecoyith CamScanner
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