On March 1, 2023, Sunland Ltd. purchased a machine for $63,000 by paying $21,000 down and issuing a note for the balance. The machine had an estimated useful life of nine years and an estimated residual value of $6,300. Sunland Winds uses the straight-line method of depreciation and has a December 31 year end. On October 30, 2025, the machine was sold for $59,000. (a) Your answer is incorrect. Prepare the journal entry to record the acquisition of the machine. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date Mar. 1, 2023 Account Titles and Explanation Depreciation Expense Accumulated Depreciation Equipment Debit 12,600 Credit

On March 1, 2023, Sunland Ltd. purchased a machine for $63,000 by paying $21,000 down and issuing a note for the balance. The machine had an estimated useful life of nine years and an estimated residual value of $6,300. Sunland Winds uses the straight-line method of depreciation and has a December 31 year end. On October 30, 2025, the machine was sold for $59,000. (a) Your answer is incorrect. Prepare the journal entry to record the acquisition of the machine. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date Mar. 1, 2023 Account Titles and Explanation Depreciation Expense Accumulated Depreciation Equipment Debit 12,600 Credit

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Description: On March 1, 2023, Sunland Ltd. purchased a machine for $63,000 by paying $21,000 down and issuing a note for the balance. Themachine had an estimated useful life of nine years and an estimated residual value of $6,300. Sunland Winds uses the straigh

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

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 7RE: Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of...

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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.
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.
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?
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