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Problem - Intermediate Accounting - Property, Plant and Equipment - ABC Co. acquired a machine on January 1, 20x1 at a purchase price of P1,200,000. The machine was estimated to have a useful life of 20 years and a residual value of P100,000. It was also estimated that the machine can produce up to 1,000,000 units of product over its useful life. The actual units produced were 40,000 units and 50,000 units in 20x1 and 20x2, respectively.
Requirements -
Compute the (1) Depreciation expenses in 20x1 and 20x2 and the (2) Carrying amounts of the machine on December 31, 20x2, respectively, under each of the following depreciation methods: a. Straight-line method b. Sum-of-the-Years' digit method c. Double declining balance method d. Units of production method.
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