On January 1, 2020, Pink Corp. 'sold' a machine for $8000 to Slink Corp., its wholly-owned subsidiary. Pink paid $16000 for this machine. At January 1, 2020, accumulated depreciation was $7000. The remaining useful life is assumed to be 10 years. Straight line depreciation is used by both companies. In Pink's December 31, 2020 consolidated income statement, at what amount should DEPRECIATION EXPENSE be reported?
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- Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of zero. Bliss uses the straight -line method of depreciation. At the beginning of the sixth year, the assets book value is 200,000 and Bliss changes the estimate of the assets life to 25 years, so that 20 years now remain in the assets life. Explain how this change will be accounted for in Blisss financial statements, and compute the current and future annual depreciation expense.On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 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.
- On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was estimated at 2,000. The equipment will be depreciated over 10 years using the double-declining balance method. Counting the year of acquisition as one-half year, Mundo should record 2019 depredation expense of: a. 7,680 b. 9,000 c. 9,600 d. 10,000Kam 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.On January 1, 2020, Pink Corp. 'sold' a machine for $8000 to Slink Corp., its wholly-owned subsidiary. Pink paid $18000 for this machine. At January 1, 2020, accumulated depreciation was $10000. The remaining useful life is assumed to be 5 years. Straight line depreciation is used by both companies. In Pink's December 31, 2020 consolidated balance sheet, at what amount should ACCUMULATED DEPRECIATION be reported? BE SURE TO TYPE A SIMPLE NUMBER WITH NO COMMAS OR DOLLAR SIGNS. FOR EXAMPLE, TYPE 1000 INSTEAD OF $1,000.
- On January 1, 2020, Pink Corp. 'sold' a machine for $6000 to Slink Corp., its wholly-owned subsidiary. Pink paid $18000 for this machine. At January 1, 2020, accumulated depreciation was $6000. The remaining useful life is assumed to be 10 years. Straight line depreciation is used by both companies. In Pink's December 31, 2020 consolidatedincome statement, at what amount should DEPRECIATION EXPENSE be reported? BE SURE TO TYPE A SIMPLE NUMBER WITH NO COMMAS OR DOLLAR SIGNS. FOR EXAMPLE, TYPE 1000 INSTEAD OF $1,000.On January 1, 2019 Pink Corp. sold a machine for $7,400 to slink Corp., its wholly-owned subsidiary. Pink paid $13,00 for this machine. On January 1, 2019, accumulated depreciation was $4,500. The remaining useful life is assumed to be 5 years. Straight line depreciation is used by both companies. In pink's December 31, 2019 consolidated balance sheet, at what amount should accumulated depreciation be reported?On January 1, 2019, Ferrothorn Co. sold equipment, to its subsidiary, Klang Corp., for P115,000. The equipment had cost P125,000 and the balance in accumulated depreciation was P45,000. The equipment had an estimated remaining useful life of eight years and P0 salvage value. Both companies use straight-line depreciation. On their separate 2019 income statements, Ferrothorn and Klang reported depreciation expense of P84,000 and P60,000 respectively. The amount of depreciation expense on the consolidated income statement for 2019 would have been:
- On January 1, 2019, TPS Company purchased for P4,800,000 a machine with a useful life of ten years and a residual value of P200,000. The machine was depreciated by the double declining balance and the carrying amount of the machine was P3,072,000 on December 31, 2020. The entity changed to the straight line method on January 1, 2021. The residual value did not change. What is the depreciation expense on this machine for 2021? A P359,000 B) P384,000 c) P287,200 D) P575,000On January 1, 2022, Sunland Corporation acquired machinery for $1660000. Sunland adopted the straight-line method ofdepreciation for this machine and had been recording depreciation over an estimated life of ten years, with no residual value. At the beginning of 2025, a decision was made to change to the double-declining balance method of depreciation for this machine.Assuming a 20% tax rate, the cumulative effect of this accounting change on beginning retained earnings, isA) $0.B) $249664.C) $312080.D) $185920.On January 1. 2021, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $180,000 in cash. The equipment had originally cost $162.000 but had a book value of only $99.000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $480,000 in net income in 2021 (not including any investment income) while Brannigan reported $157.400. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which was amortized at a rate of $5,800 per year a. What is consolidated net income for 2021? What is the parent's share of consolidated net income for 2021 If Ackerman owns only 90 percent of Brannigan? c. yhat is the parent's share of consolidated net income for 2021 if Ackerman owns only 90 percent of Brannigan and the equipment transfer was upstream? What is the consolidated net income for 2022 f Ackerman reports $500.000 (does not Include…