Astrom Ltd. purchased a piece of equipment on May 12, 2020, for $51,200. At the time,...

Astrom Ltd. purchased a piece of equipment on May 12, 2020, for $51,200. At the time, management determined that the equipment would have a 4-year useful life and a residual value of $4,400. Astrom uses the straight-line depreciation method for its equipment, and the company has a December 31 year end. Also assume that Astrom sold the equipment on September 25, 2022, for $20,725. Prepare all necessary journal entries for 2020, 2021, and 2022 related to each of the following scenarios:

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On January 1, 20x2, Astro Ltd. purchased a piece of equipment costing $84816. At the time,...

On January 1, 20x2, Astro Ltd. purchased a piece of equipment costing $84816. At the time, the equipment’s useful life was expected to be 8 years with an estimated residual value of $15821. In 20x6, these estimates were revised: the total estimated useful life of the equipment is expected to be 12 years and the residual value is expected to be $11736. What will the depreciation expense be for 20x6? Assume the company uses straight-line depreciation.

On July 1, 2020, Burgoyne Corp. purchased a new piece of equipment for $300,000. The equipment...

On July 1, 2020, Burgoyne Corp. purchased a new piece of equipment for $300,000. The equipment has an estimated useful life of 5 years and an estimated residual value of $25,000. Burgoyne uses the calendar year as its fiscal year, and records depreciation to the nearest month. a:$60,000 b:$30,000 c:$27,500 d:$55,000

A company purchased a piece of equipment for $40,000 on January 1, 2018. At that time...

A company purchased a piece of equipment for $40,000 on January 1, 2018. At that time the company estimated the equipment would have a 6-year useful life and no salvage value. The company used straight-line depreciation based on this information used through 2019. On December 31, 2020, the company determined the equipment instead has a 9-year useful life, with no salvage value. The company's tax rate has been 20% since 2015. What is the necessary adjustment to beginning retained earnings...

In 2020, you purchased a piece of equipment for $125000. You will use the Straight Line...

In 2020, you purchased a piece of equipment for $125000. You will use the Straight Line Depreciation method and will use a depreciable salvage value of $6,000. The equipment has a depreciable and useful life of five years. The first-year benefit is $20,000 and increases by $5,000 each year thereafter. You sell the equipment at the end of year 5 for a market value of $15000. You are in the 32% income tax bracket. Ordinary gains/losses are taxed at 18%...

Bio Ltd purchased a piece of equipment in January 2016 for $5,000,000 which had an estimated...

Bio Ltd purchased a piece of equipment in January 2016 for $5,000,000 which had an estimated useful life of 8 years with no residual value. By 31 December 2018, new technology was introduced that would accelerate the obsolescence of this equipment. Bio Ltd estimated that the present value of the expected future net cash flows on this equipment would be $2,600,000 and that the fair value less cost to sell the equipment would be $2,800,000. Bio Ltd intends to continue...

Recharge Ltd. purchased a patent on January 1, 2020, for $ 1,120,000. At the time of...

Recharge Ltd. purchased a patent on January 1, 2020, for $ 1,120,000. At the time of the purchase, the patent had a remaining legal life of 20 years. In January 2023, Recharge spent $ 92,000 successfully defending the patent in court. One of the other results of the court case was the discovery that the patent would only have a remaining useful life of 9 years. Recharge’s year end was December 31. Required 1. Prepare the entries on the books...

Yi Tech Inc. purchased a piece of equipment on 1/1/2016 for $20,000. At the time of...

Yi Tech Inc. purchased a piece of equipment on 1/1/2016 for $20,000. At the time of purchase the accountant estimated its useful life at 10 years and a salvage value of $1,000. The company uses straight-line depreciation. On 1/1/18, the accountant changed the estimates. He decided a 5-year useful life with a $2,000 salvage value is more appropriate. Note: This is considered a change in accounting estimate and will be reflected in the year the change was made in earnings...

ABC Ltd. sold equipment on June 30 2020 for $110,000. The equipment had originally been purchased...

ABC Ltd. sold equipment on June 30 2020 for $110,000. The equipment had originally been purchased for $160,000 on July 1, 2015. At the time of purchase, the equipment’s useful life was estimated to be ten years and to only be worth $10,000 as scrap value at that time. What was the gain or loss reported by ABC on the sale of the equipment? (State any assumptions you make).

Manufacturing Company purchased a piece of equipment for $1,520,000 at the beginning of 2014. The equipment...

Manufacturing Company purchased a piece of equipment for $1,520,000 at the beginning of 2014. The equipment has an estimated useful life of four years and an estimated residual value of $150,000. The equipment should produce 20,000 units. It produced in each year: 4,000 in 2014; 8,000 in 2015; 5,000 in 2016; and 3,000 in 2017. Required (10 points): a. Compute the annual depreciation expense, accumulated depreciation and carrying value for the equipment for each year assuming the following depreciation methods...

Stevens Ltd is the leading retailer of Gym equipment. The following information occurred during May 2020....

Stevens Ltd is the leading retailer of Gym equipment. The following information occurred during May 2020. Stevens Ltd had an opening inventory balance of $8,400,000. May: 1 Returned to the suppliers $80,000 of the opening inventory and received cash. 12 Purchased additional inventory on credit from the supplier for $12,000,000. 18 Sold inventory for $6,000,000 cash (Cost price to Stevens Ltd $2,400,000). 19 Paid the suppliers the account from 12 May. 31 The closing stocktake at...

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