Problem 8-12 (IAA) On January 1, 2021, Canyon Company decided to decrease the estimated useful life of the patent from 10 years to 8 years. The patent was purchased on January 1, 2016 for P3,000,000 with estimated residual value of zero. The entity decided on January 1, 2021 to change the depreciation method from accelerated method to straight line. On January 1, 2021, the cost of the equipment is P8,000,000 and the accumulated depreciation is P3,400,000. The remaining useful life of the equipment on January 1, 2021 is 10 years and the residual value is P200.000. What amount should be recorded as total charge against 2021 income as a result of the accounting changes? a. 940,000 b. 960,000 c. 627,500 d. 647,500

Problem 8-12 (IAA) On January 1, 2021, Canyon Company decided to decrease the estimated useful life of the patent from 10 years to 8 years. The patent was purchased on January 1, 2016 for P3,000,000 with estimated residual value of zero. The entity decided on January 1, 2021 to change the depreciation method from accelerated method to straight line. On January 1, 2021, the cost of the equipment is P8,000,000 and the accumulated depreciation is P3,400,000. The remaining useful life of the equipment on January 1, 2021 is 10 years and the residual value is P200.000. What amount should be recorded as total charge against 2021 income as a result of the accounting changes? a. 940,000 b. 960,000 c. 627,500 d. 647,500

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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