Reference no: EM132678538
On January 1, 2015, Indigo Corporation, a small manufacturer of machine tools, acquired new industrial equipment for $1,300,000. The new equipment had a useful life of five years and the residual value was estimated to be $59,000. Indigo estimates that the new equipment can produce 14,000 machine tools in its first year. It estimates that production will decline by 1,000 units per year over the equipment's remaining useful life.
The following depreciation methods may be used: (1) straight-line, (2) double-declining-balance, and (3) unit of production. For tax purposes, the CCA class is Class 10-30%.
Problem 1: show a schedule showing the amount of accumulated depreciation at December 31, 2017, under straight-line method, double-declining balance method and units-of-output method. (Round depreciation per unit to 0 decimal places, e.g. 15 and final answer to 0 decimal places, e.g. 1,575.)
Problem 2: Which of the three depreciation methods would maximize net income for financial statement reporting purposes for the three-year period ending December 31, 2017?
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Show a schedule showing amount of accumulated depreciation
: Show a schedule showing the amount of accumulated depreciation at December 31, 2017, under straight-line method, double-declining balance method
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Make entry that required to correct prior years depreciation
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Prepare the journal entry needed for the february
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Prepare journal entry to record the increase in fair value
: The equipment's fair value at December 31, 2018, is $4.81 million. Prepare the journal entry, if any, to record the increase in fair value.
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What adjustment should be made to the consolidated
: What adjustment should be made to the consolidated financial statements for the year ended December 31, 20X6, for the fair value increment
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