Question
In: Accounting
A company purchased a piece of manufacturing equipment for $30,000 on January 1, 2018. At that...
A company purchased a piece of manufacturing equipment for $30,000 on January 1, 2018. At that time, the company estimated the equipment would have a 7-year useful life and no salvage value. The company used straight-line depreciation based on this information through 2019. On December 31, 2020, the company determined the equipment instead has a 10-year useful life, with no salvage value. The company’s tax rate has been 30% since 2015.
What is the necessary adjustment to beginning retained earnings in 2020 for this change?
Solutions
ekkarill92 answered 11 months agoRelated Solutions
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...
On January 1, 2018, Aylmer Inc purchased a piece of equipment. The equipment is expected to...
On January 1, 2018, Aylmer Inc purchased a piece of equipment. The
equipment is expected to
produce
25,000 units over it's useful life. The equipment cost
$520,000.
Units
produced:
Other
IMPORTANT information:
2018
3000
Fair
value at:
2019
3200
31-Dec-20
$ 306,500
2020
3800
2021
4300
Balance
in Revaluation Surplus:
$
1,375
2022
3700
2023
3600
2024
3600
REQUIRED:
Prepare
all necessary journal entries at:
01-Jan-18
31-Dec-18
31-Dec-19
31-Dec-20
The units each year is posted. This is the only information...
On January 1, 2018, Iron Limited purchased a piece of equipment for production of goods. The...
On January 1, 2018, Iron Limited purchased a piece of equipment
for production of goods.
The purchase price of the equipment was $670,000. Iron Limited
paid on the date of purchase by the issue of ordinary shares. Iron
Limited estimated that the equipment has an expected useful life of
4 years with a residual value of $30,000 on December 31, 2021.
On February 15, 2020, Iron Limited disposed of equipment for
cash amount of $358,000. Iron Limited adopts revaluation model...
Question 1 Part a On January 1, 2018, Iron Limited purchased a piece of equipment for...
Question 1
Part a
On January 1, 2018, Iron Limited purchased a piece of equipment for
production of goods. The purchase price of the equipment was
$670,000. Iron Limited paid on the date of purchase by the issue of
ordinary shares. Iron Limited estimated that the equipment has an
expected useful life of 4 years with a residual value of $30,000 on
December 31, 2021. On February 15, 2020, Iron Limited disposed of
equipment for cash amount of $358,000.
Iron...
1. On January 1, 2019, ABC Company purchased a new piece of equipment. The equipment was...
1. On January 1, 2019, ABC Company purchased a new piece of equipment.
The equipment was assigned a $7,000 residual value and is expected
to produce a total of 60,000 units over its life. The depreciation
expense reported on the equipment for 2019 was $10,734. During 2020,
the equipment was used to produce 9,000 units. At December 31, 2020,
the book value of the equipment was $57,466. ABC Company is using the
units-of-production depreciation method to depreciate the equipment.
Calculate...
Change in Estimates. On January 1, 2018, Hogan Manufacturing Co. purchased equipment for $400,000. The company...
Change in Estimates. On January 1, 2018, Hogan
Manufacturing Co. purchased equipment for $400,000. The company
expects the equipment to be in use for 6 years, and to have a
salvage value of 10% of the original cost at the end of its useful
life. At the beginning of 2020, Hogan revised its estimate of the
equipment’s useful life from 6 years to a total of 10 years, and
also at that time reduced the estimated salvage value to zero....
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...
On January 2, 2018, the Jackson Company purchased equipment to be used in its manufacturing process....
On January 2, 2018, the Jackson Company purchased equipment to
be used in its manufacturing process. The equipment has an
estimated life of eight years and an estimated residual value of
$43,625. The expenditures made to acquire the asset were as
follows: Purchase price $ 198,000 Freight charges 5,200
Installation charges 8,000 Jackson’s policy is to use the
double-declining-balance (DDB) method of depreciation in the early
years of the equipment’s life and then switch to straight line
halfway through the...
On January 2, 2018, the Jackson Company purchased equipment to be used in its manufacturing process....
On January 2, 2018, the Jackson Company purchased equipment to
be used in its manufacturing process. The equipment has an
estimated life of eight years and an estimated residual value of
$61,500. The expenditures made to acquire the asset were as
follows: Purchase price $ 258,500 Freight charges 9,600
Installation charges 13,500 Jackson’s policy is to use the
double-declining-balance (DDB) method of depreciation in the early
years of the equipment’s life and then switch to straight line
halfway through the...
On January 2, 2018, the Jackson Company purchased equipment to be used in its manufacturing process....
On January 2, 2018, the Jackson Company purchased equipment to
be used in its manufacturing process. The equipment has an
estimated life of eight years and an estimated residual value of
$63,125. The expenditures made to acquire the asset were as
follows: Purchase price $ 264,000 Freight charges 10,000
Installation charges 14,000 Jackson’s policy is to use the
double-declining-balance (DDB) method of depreciation in the early
years of the equipment’s life and then switch to straight line
halfway through the...
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