Reference no: EM133108375

Question - In 2019, the controller of the Jean Corporation, an SME, asked you to prepare to correct journal entries for the following three situations:

1. On January 1, 2017, Jean Corporation paid P400,000 for machine 1. It was estimated to have a residual value of P50,000 and a service life of ten years. It has been depreciated for two years using the double-declining balance method. Jean Corporation decided to switch to the straight-line approach at the start of the third year.

2. On January 1, 2014, Jean Corporation paid P500,000 for machine 2. Straight-line depreciation has been recorded for five years, with a balance of P250,000 in the accumulated depreciation account. The projected residual value remains at P50,000, but the service life has been increased to one year from the original estimate.

3. On January 1, 2018, Jean Corporation purchased machine 3 for P200,000. For one year, a 150% decline in balance depreciation was recorded. The machine's estimated residual value is P20,000, and its anticipated useful life is five years. The corporation recorded a depreciation of P54,000 and P37,800 for 2018 and 2019, respectively, for two years, including the current year.

Required -

1. Compute the carrying value of Machine 1, Machine 2, and Machine 3 on December 31, 2019.

2. Compute the Depreciation for 2019.