Question
In: Accounting
The Collins Corporation purchased office equipment at the beginning of 2019 and capitalized a cost of...
The Collins Corporation purchased office equipment at the
beginning of 2019 and capitalized a cost of $2,344,000. This cost
included the following expenditures:
| Purchase price | $ | 2,040,000 | |
| Freight charges | 50,000 | ||
| Installation charges | 40,000 | ||
| Annual maintenance charge | 214,000 | ||
| Total | $ | 2,344,000 | |
The company estimated an eight-year useful life for the equipment.
No residual value is anticipated. The double-declining-balance
method was used to determine depreciation expense for 2019 and
2020.
In 2021, after the 2020 financial statements were issued, the
company decided to switch to the straight-line depreciation method
for this equipment. At that time, the company’s controller
discovered that the original cost of the equipment incorrectly
included one year of annual maintenance charges for the
equipment.
Required:
1 & 2. Ignoring income taxes, prepare the
appropriate correcting entry for the equipment capitalization error
discovered in 2021 and any 2021 journal entries related to the
change in depreciation methods. (If no entry is required
for a transaction/event, select "No journal entry required" in the
first account field. Round your final answers to the nearest whole
dollar.)
Solutions
ekkarill92 answered 2 years agoRelated Solutions
The Collins Corporation purchased office equipment at the beginning of 2019 and capitalized a cost of...
The Collins Corporation purchased office equipment at the
beginning of 2019 and capitalized a cost of $2,200,000. This cost
included the following expenditures:
Purchase price
$
1,960,000
Freight charges
42,000
Installation charges
32,000
Annual maintenance charge
166,000
Total
$
2,200,000
The company estimated an eight-year useful life for the equipment.
No residual value is anticipated. The double-declining-balance
method was used to determine depreciation expense for 2019 and
2020.
In 2021, after the 2020 financial statements were issued, the
company decided...
The Collins Corporation purchased office equipment at the beginning of 2019 and capitalized a cost of...
The Collins Corporation purchased office equipment at the
beginning of 2019 and capitalized a cost of $2,308,000. This cost
included the following expenditures:
Purchase price
$
2,020,000
Freight charges
48,000
Installation charges
38,000
Annual maintenance charge
202,000
Total
$
2,308,000
The company estimated an eight-year useful life for the equipment.
No residual value is anticipated. The double-declining-balance
method was used to determine depreciation expense for 2019 and
2020.
In 2021, after the 2020 financial statements were issued, the
company decided...
Collins Corporation purchased office equipment at the beginning of 2019 and capitalized a cost of $2,072,000....
Collins Corporation purchased office equipment at the beginning
of 2019 and capitalized a cost of $2,072,000. This cost figure
included the following expenditures: Purchase price $ 1,910,000
Freight charges 36,000 Installation charges 26,000 Annual
maintenance charge 100,000 Total $ 2,072,000 The company estimated
an eight-year useful life for the equipment. No residual value is
anticipated. The double-declining-balance method was used to
determine depreciation expense for 2019 and 2020. In 2021, after
the 2020 financial statements were issued, the company decided...
Collins Corporation purchased office equipment at the beginning of 2016 and capitalized a cost of $1,902,000....
Collins Corporation purchased office equipment at the beginning
of 2016 and capitalized a cost of $1,902,000. This cost figure
included the following expenditures:
Purchase price
$
1,760,000
Freight
charges
21,000
Installation
charges
11,000
Annual
maintenance charge
110,000
Total
$
1,902,000
The company estimated an eight-year useful life for the equipment.
No residual value is anticipated. The double-declining-balance
method was used to determine depreciation expense for 2016 and
2017.
In 2018, after the 2017 financial statements were issued, the
company decided...
Collins Corporation purchased office equipment at the beginning of 2016 and capitalized a cost of $1,974,000....
Collins Corporation purchased office equipment at the beginning
of 2016 and capitalized a cost of $1,974,000. This cost figure
included the following expenditures: Purchase price $ 1,820,000
Freight charges 27,000 Installation charges 17,000 Annual
maintenance charge 110,000 Total $ 1,974,000 The company estimated
an eight-year useful life for the equipment. No residual value is
anticipated. The double-declining-balance method was used to
determine depreciation expense for 2016 and 2017. In 2018, after
the 2017 financial statements were issued, the company decided...
Collins Corporation purchased office equipment at the beginning of 2011 and capitalized a cost of $1,972,000....
Collins Corporation purchased office equipment at the beginning
of 2011 and capitalized a cost of $1,972,000. This cost figure
included the following expenditures:
Purchase price
$
1,810,000
Freight charges
26,000
Installation charges
16,000
Annual maintenance charge
120,000
Total
$
1,972,000
The company estimated an eight-year useful life for the
equipment. No residual value is anticipated. The
double-declining-balance method was used to determine depreciation
expense for 2011 and 2012.
REQUIRED:
1. Ignoring taxes, prepare the appropriate correcting entry for
the equipment...
The Earland Corporation purchased equipment at the beginning of 20x7 and capitalized a cost of $2,000,000....
The Earland Corporation purchased equipment at the beginning of
20x7 and capitalized a cost of $2,000,000. This cost included the
following expenditures:
Purchase price $1,850,000
Freight charges 30,000
Installation charges 20,000
Annual maintenance charge 100,000
Total=$2,000,000
The company equipment is being depreciated at a diminishing
balance rate of 15% with no residual value. In 20x9, after the 20x8
financial statements were issued, the company decided to switch to
the straight-line method of depreciation to reflect a change in the
expected...
Alteran Corporation purchased office equipment for $1.7 million at the beginning of 2019. The equipment is...
Alteran Corporation purchased office equipment for $1.7 million
at the beginning of 2019. The equipment is being depreciated over a
10-year life using the double-declining-balance method. The
residual value is expected to be $800,000. At the beginning of 2021
(two years later), Alteran decided to change to the straight-line
depreciation method for this equipment.
Prepare the journal entry to record depreciation for 2021.
(If no entry is required for a transaction/event, select
"No journal entry required" in the first account...
Alteran Corporation purchased office equipment for $1.9 million at the beginning of 2019. The equipment is...
Alteran Corporation purchased office equipment for $1.9 million
at the beginning of 2019. The equipment is being depreciated over a
10-year life using the double-declining-balance method. The
residual value is expected to be $400,000. At the beginning of 2021
(two years later), Alteran decided to change to the straight-line
depreciation method for this equipment.
Required:
Prepare the journal entry to record depreciation for 2021.
(If no entry is required for a transaction/event, select
"No journal entry required" in the first...
Problem 20-11 Error correction; change in depreciation method [LO20-6] The Collins Corporation purchased office equipment at...
Problem 20-11 Error correction; change in depreciation method
[LO20-6]
The Collins Corporation purchased office equipment at the
beginning of 2016 and capitalized a cost of $2,180,000. This cost
included the following expenditures:
Purchase price
$
1,970,000
Freight charges
42,000
Installation charges
32,000
Annual maintenance charge
136,000
Total
$
2,180,000
The company estimated an eight-year useful life for the equipment.
No residual value is anticipated. The double-declining-balance
method was used to determine depreciation expense for 2016 and
2017.
In 2018, after...
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