Accounting: What the Numbers Mean
11th Edition
ISBN: 9781259535314
Author: David Marshall, Wayne William McManus, Daniel Viele
Publisher: McGraw-Hill Education
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Chapter 6, Problem 6.24P
Problem 6.24
LO 3
Partial-year
Required:
- Using the
straight-line depreciation method , calculate the depreciation expense to be recognized in the income statement for the year ended December 31, 2018, and the balance of theAccumulated Depreciation account as of December 31, 2018. (Note: This is the third calendar year in which the asset has been used.) - Using the double-declining-balance depreciation method, calculate the depreciation expense for the year ended December 31, 2018, and the net book value of the machine at that date.
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Problem 4
The following information pertains to Bosh Inc.'s depreciable assets:
• Machine Y cost P525,000 and was acquired on January 1, 2016. On the acquisition date, the
expected useful life was 12 years with no residual value. The straight line method was used. On
January 1, 2020, it was estimated that the remaining life of the asset would be 4 years and that
there would be a P25,000 residual value.
• A building was purchased on January 1, 2017 for P3,000,000. The building was expected to have
a useful life of 20 years with no residual value. The straight line depreciation method was used.
On January 1, 2020, a change was made to the sum-of-the-years'-digits method of depreciation.
No change was made to the estimated useful life and residual value of the building.
_3. What is the depreciation expense of Machine Y for 2020?
_4. What is the depreciation expense of building for 2022?
Question 1
On January 1, 2014, Evers Company purchased the following machine for use in its production process:
Machine: The recorded cost of this machine was $180,000. Evers estimates that the useful life of the
machine is 4 years with a $10,000 salvage value remaining at the end of that time period.
Instructions
a) Calculate the amount of depreciation expense that Evers should record each year of its useful life under
the following assumptions. Show your workings.
(1) Straight-line method
(2) Double declining balance method
(3) Units-of-activity method and estimates that the useful life of machine is 125,000 units. Actual
usage is as follows: 2014, 45,000 units; 2015, 35,000 units; 2016, 25,000 units; 2017, 20,000
units.
b) Which method used to calculate depreciation reports the highest amount of depreciation expense
year 1? The highest in year 4? The highest total amount over the 4-year period?
in
EXERCISE 9.6 Revision of Depreciation Estimates e LO9-3
Swindall Industries uses straight-line depreciation on all of its depreciable assets. The company records annual depreciation
expense at the end of each calendar year. On January 11, 2017, the company purchased a machine costing $90,000. The
machine's useful life was estimated to be 12 years with an estimated residual value of $18,00o. Depreciation for partial years is
recorded to the nearest full month.
In 2021, after almost five years of experience with the machine, management decided to revise its estimated life from 12 years
to 20 years. No change was made in the estimated residual value. The revised estimate of the useful life was decided prior to
recording annual depreciation expense for the year ended December 31, 2021.
a. Prepare journal entries in chronological order for the given events, beginning with the purchase of the machinery on
January 11, 2017. Show separately the recording of depreciation expense in 2017 through…
Chapter 6 Solutions
Accounting: What the Numbers Mean
Ch. 6 - Prob. 6.1MECh. 6 - Prob. 6.2MECh. 6 - Mini-Exercise 6.3 LO 3 Depreciation calculation...Ch. 6 - Prob. 6.4MECh. 6 - Mini-Exercise 6.5 LO 9 Goodwill Backstreets Co....Ch. 6 - Prob. 6.6MECh. 6 - Exercise 6.7 LO 1 Basket purchase allocation...Ch. 6 - Prob. 6.8ECh. 6 - Prob. 6.9ECh. 6 - Prob. 6.10E
Ch. 6 - Exercise 6.11 LO 3 Effect of depreciation on ROI...Ch. 6 - Exercise 6.12 LO 3 Financial statement effects of...Ch. 6 - Exercise 6.13 LO 3 Depreciation calculation...Ch. 6 - Exercise 6.14 LO 3 Depreciation calculation...Ch. 6 - Prob. 6.15ECh. 6 - Prob. 6.16ECh. 6 - Prob. 6.17ECh. 6 - Exercise 6.18 LO 9 Goodwill-effect on ROI and...Ch. 6 - Exercise 6.19 LO 6, 8, 9 Transaction...Ch. 6 - Exercise 6.20 LO 3, 4, 6, 8 Transaction...Ch. 6 - Prob. 6.21PCh. 6 - Prob. 6.22PCh. 6 - Prob. 6.23PCh. 6 - Problem 6.24 LO 3 Partial-year depreciation...Ch. 6 - Problem 6.25
LO 3
Identify depreciation methods...Ch. 6 - Prob. 6.26PCh. 6 - Prob. 6.27PCh. 6 - Prob. 6.28PCh. 6 - Prob. 6.29PCh. 6 - Prob. 6.30PCh. 6 - Prob. 6.31PCh. 6 - Prob. 6.32PCh. 6 - Prob. 6.33CCh. 6 - Prob. 6.34CCh. 6 - Case 6.35 LO 3, 6 Capstone analytical review of...
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