Cengagenowv2, 1 Term Printed Access Card For Wahlen/jones/pagach’s Intermediate Accounting: Reporting And Analysis, 2017 Update, 2nd
2nd Edition
ISBN: 9781337912259
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 22, Problem 8P
At the beginning of 2017, Holden Company’s controller asked you to prepare correcting entries for the following three situations:
1. Machine X was purchased for $100,000 on January 1, 2012. Straight-line depreciation has been recorded for 5 years, and the
2. Machine Y was purchased for $40,000 on January 1, 2015. It had an estimated residual value of $4,000 and an estimated service life of 8 years. It has been
3. Machine Z was purchased for $80,000 on January 1, 2016. Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value is $8,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value.
Required:
Prepare any necessary correcting journal entries for each situation. Also prepare the
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
On
August
31,
2018,
Option
Landscapes discarded equipment that had a cost of
$16,500.
Accumulated Depreciation as of
December
31,
2017,
was
$15,000.
Assume annual depreciation on the equipment is
$1,500.
Journalize the partial-year depreciation expense and disposal of the equipment. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
Five Satins Company purchased a piece of equipment at the beginning of 2017. The equipment cost $430,000. It has an estimated service life of 8 years and an expected salvage value of $70,000. The sum-of-the-years’-digits method of depreciation is being used. Someone has already correctly prepared a depreciation schedule for this asset. This schedule shows that $60,000 will be depreciated for a particular calendar year.
Instructions
Show calculations to determine for what particular year the depreciation amount for this asset will be $60,000.
The Peridot Company purchased machinery on January 2, 2014, for $800,000. A five-year life was estimated and no residual value was anticipated. Peridot decided to use the straight-line depreciation method and recorded $160,000 in depreciation in 2014 and 2015. Early in 2016, the company revised the total estimated life of the machinery to eight years. Required: 1. What type of change is this? 2. Briefly describe the accounting treatment for this change. 3. Determine depreciation for 2016.
Chapter 22 Solutions
Cengagenowv2, 1 Term Printed Access Card For Wahlen/jones/pagach’s Intermediate Accounting: Reporting And Analysis, 2017 Update, 2nd
Ch. 22 - Prob. 1GICh. 22 - Prob. 2GICh. 22 - Prob. 3GICh. 22 - What steps are necessary to apply the...Ch. 22 - Prob. 5GICh. 22 - Prob. 6GICh. 22 - Prob. 7GICh. 22 - Prob. 8GICh. 22 - Define a change in estimate. What is the proper...Ch. 22 - Prob. 10GI
Ch. 22 - How is a change in depreciation method accounted...Ch. 22 - Describe a change in a reporting entity. How does...Ch. 22 - Prob. 13GICh. 22 - Prob. 14GICh. 22 - Prob. 15GICh. 22 - Prob. 16GICh. 22 - Prob. 17GICh. 22 - Prob. 18GICh. 22 - Prob. 19GICh. 22 - Prob. 20GICh. 22 - The cumulative effect of an accounting change...Ch. 22 - When a change in accounting principle is made...Ch. 22 - Prob. 3MCCh. 22 - A change in the expected service life of an asset...Ch. 22 - Prob. 5MCCh. 22 - Generally, how should a change in accounting...Ch. 22 - Prob. 7MCCh. 22 - A company has included in its consolidated...Ch. 22 - Prob. 9MCCh. 22 - Prob. 10MCCh. 22 - Prob. 1RECh. 22 - Prob. 2RECh. 22 - Prob. 3RECh. 22 - Prob. 4RECh. 22 - Bloom Company had beginning unadjusted retained...Ch. 22 - Suppose that Blake Companys total pretax...Ch. 22 - Bliss Company owns an asset with an estimated life...Ch. 22 - At the end of 2016, Framber Company received 8,000...Ch. 22 - Prob. 9RECh. 22 - Prob. 10RECh. 22 - Prob. 11RECh. 22 - Prob. 12RECh. 22 - The following are independent events: a. Changed...Ch. 22 - Prob. 2ECh. 22 - The following are independent events: a. A...Ch. 22 - Prob. 4ECh. 22 - Prob. 5ECh. 22 - Prob. 6ECh. 22 - Prob. 7ECh. 22 - Prob. 8ECh. 22 - Prob. 9ECh. 22 - Prob. 10ECh. 22 - Prob. 11ECh. 22 - The following are independent errors made by a...Ch. 22 - The following are independent errors made by a...Ch. 22 - Refer to the information in E22-13. Required:...Ch. 22 - Prob. 15ECh. 22 - Prob. 16ECh. 22 - Prob. 1PCh. 22 - Prob. 2PCh. 22 - Prob. 3PCh. 22 - Prob. 4PCh. 22 - Prob. 5PCh. 22 - Prob. 6PCh. 22 - Prob. 7PCh. 22 - At the beginning of 2017, Holden Companys...Ch. 22 - Prob. 9PCh. 22 - Prob. 10PCh. 22 - Prob. 11PCh. 22 - Prob. 12PCh. 22 - Prob. 13PCh. 22 - Prob. 14PCh. 22 - There are three types of accounting changes:...Ch. 22 - Prob. 2CCh. 22 - Prob. 3CCh. 22 - When the FASB issues a new generally accepted...Ch. 22 - It is important in accounting theory to be able to...Ch. 22 - Prob. 6CCh. 22 - Prob. 7CCh. 22 - Prob. 8CCh. 22 - Prob. 9CCh. 22 - Prob. 10C
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- At the beginning of 2020, Holden Companys controller asked you to prepare correcting entries for the following three situations: 1. Machine X was purchased for 100,000 on January 1, 2015. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 45,000. The estimated residual value remains at 10,000, but the service life is now estimated to be 1 year longer than originally estimated. 2. Machine Y was purchased for 40,000 on January 1, 2018. It had an estimated residual value of 4,000 and an estimated service life of 8 years. It has been depreciated under the sum-of-the-years-digits method for 2 years. Now, the company has decided to change to the straight-line method. 3. Machine Z was purchased for 80,000 on January 1, 2019. Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value is 8,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry for each situation to record the depreciation for 2020. Ignore income taxes.arrow_forwardDuring 2019, Ryel Companys controller asked you to prepare correcting journal entries for the following three situations: 1. Machine A was purchased for 50,000 on January 1, 2014. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 25,000. The estimated residual value remains at 5,000, but the service life is now estimated to be 1 year longer than estimated originally. 2. Machine B was purchased for 40,000 on January 1, 2017. It had an estimated residual value of 5,000 and an estimated service life of 10 years. it has been depreciated under the double-declining-balance method for 2 years. Now, at the beginning of the third year, Ryel has decided to change to the straight-line method. 3. Machine C was purchased for 20,000 on January 1, 2018, Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value of the machine is 2,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry necessary for each situation to record depreciation expense for 2019.arrow_forwardWardell Company purchased a minicomputer on January 1, 2014, at a cost of $40,000. The computer was depreciated using the straight-line method over an estimated five-year life with an estimated residual value of $4,000. On January 1, 2016, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $900. Required: 1. Prepare the appropriate adjusting entry for depreciation in 2016 to reflect the revised estimate. 2. Repeat requirement 1 assuming that the company uses the sum-of-the-years’-digits method instead of the straight-line method.arrow_forward
- Workman Company purchased a machine on January 2,2017, for $800,000. The machine has an estimated usefullife of 5 years and a salvage value of $100,000. Depreciationwas computed by the 150% declining-balance method. What is the amount of accumulated depreciation at the end of December 31, 2018?arrow_forwardWardell Company purchased a minicomputer on January 1, 2013, at a cost of $50,000. The computer was depreciated using the straight-line method over an estimated seven-year life with an estimated residual value of $4,000. On January 1, 2016, the estimate of useful life was changed to a total of 11 years, and the estimate of residual value was changed to $800. Question Journal entries to record depreciation for 2016 would include: Debit to Depreciation Expense - Computers of $7,143 Credit to Accumulated Depreciation - Computers of $3,686 Debit to Accumulated Depreciation - Computers of $6,571 Debit to Depreciation Expense - Computers of $4,707arrow_forwardWan 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):arrow_forward
- Koffman's Warehouse purchased a forklift on January 1, 2017, for $6,000. The forklift is expected to last for five years and have a residual value of $600. Koffman's uses the double-declining-balance method for depreciation. Required: 1. Calculate the depreciation expense, accumulated depreciation, and book value for each year of the forklift's life. If necessary, round any depreciation calculations to the nearest dollar. Year AnnualDepreciation AccumulatedDepreciation Book Value 2017 $fill in the blank ea4059023fedfdb_1 $fill in the blank ea4059023fedfdb_2 $fill in the blank ea4059023fedfdb_3 2018 fill in the blank ea4059023fedfdb_4 fill in the blank ea4059023fedfdb_5 fill in the blank ea4059023fedfdb_6 2019 fill in the blank ea4059023fedfdb_7 fill in the blank ea4059023fedfdb_8 fill in the blank ea4059023fedfdb_9 2020 fill in the blank ea4059023fedfdb_10 fill in the blank ea4059023fedfdb_11 fill in the blank…arrow_forwardOn January 1, 2018, Kefauver Company purchased a piece of equipment for $375,000. The equipment had a useful life of 10 years and a residual value of $10,000. The company initially starts recording depreciation on a straight-line method. The following independent situations occur at the beginning of 2020: a. The life of the equipment was originally estimated to be 10 years but due to the wear and tear on the machine they changed it to a remaining life of 7 years. b. It was discovered that when initially recorded on the books the residual value had been ignored. Required: Prepare all journal entries related to the equipment for 2020 for each of the independent situations, ignoring income taxes.arrow_forwardRayya Co. purchases and installs a machine on January 1, 2017, at a total cost of $134,400. Straight-line depreciation is taken each year for four years assuming a eight-year life and no salvage value. The machine is disposed of on July 1, 2021, during its fifth year of service. Prepare entries to record the partial year’s depreciation on July 1, 2021, and to record the disposal under the following separate assumptions: (1) The machine is sold for $67,200 cash. (2) An insurance settlement of $56,448 is received due to the machine’s total destruction in a fire.arrow_forward
- Farr Company purchased a new van for floral deliveries on January 1, 2017. The van cost $59,000 with an estimated life of 7 years and $14,000 salvage value at the end of its useful life. The double-declining-balance method of depreciation will be used. What is the balance of the Accumulated Depreciation account at the end of 2018? Select one: a. $35,840 b. $13,440 c. $26,880 d. $8,960 e. The answer does not existarrow_forwardDuring 2019, Ryel Company’s controller asked you to prepare correcting journal entries for the following three situations: 1. Machine A was purchased for $50,000 on January 1, 2014. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of $25,000. The estimated residual value remains at $5,000, but the service life is now estimated to be 1 year longer than estimated originally. 2. Machine B was purchased for $40,000 on January 1, 2017. It had an estimated residual value of $5,000 and an estimated service life of 10 years. It has been depreciated under the double-declining-balance method for 2 years. Now, at the beginning of the third year, Ryel has decided to change to the straight-line method. 3. Machine C was purchased for $20,000 on January 1, 2018. Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value of the machine is $2,000 and the estimated service life is 5 years. The…arrow_forwardWardell Company purchased a mini computer on January 1, 2014, at a cost of $40,000. The computer has been depreciated using the straight-line method over an estimated five-year useful life with an estimated residual value of $4,000. On January 1, 2016, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $900. Required: 1. Prepare the appropriate adjusting entry for depreciation in 2016 to reflect the revised estimate. 2. Repeat requirement 1 assuming that the company uses the sum-of-the-years’-digits method instead of the straight-line method.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Accounting for Derivatives_1.mp4; Author: DVRamanaXIMB;https://www.youtube.com/watch?v=kZky1jIiCN0;License: Standard Youtube License
Depreciation|(Concept and Methods); Author: easyCBSE commerce lectures;https://www.youtube.com/watch?v=w4lScJke6CA;License: Standard YouTube License, CC-BY