What amount should be recognized as depreciation expense

Assignment Help Accounting Basics
Reference no: EM133075043

Question - At the beginning of current year, Nori Company entered into 5-year lease for drilling equipment.

The entity accounted for the acquisition as a finance lease for P2,400,000, which included a P100,000 purchase option. At the commencement date, the entity is reasonably certain to exercise the purchase option. The entity estimated that the equipment's fair value will be P200,000 at the end of the 8-year life and regularly used straight line depreciation on similar equipment. What amount should be recognized as depreciation expense on the leased asset for the current year?

a. 480,000

b. 460,000

c. 300,000

d. 275,000

Reference no: EM133075043

Questions Cloud

Characterize the fi risk exposure to fluctuations : Note: Net currency positions are foreign exchange bought minus foreign exchange sold restated in U.S. dollar terms.
How much will have after paying bank loan : The APR on your loan is 6.75% compounded monthly a) How much money you owe to bank? ) How much will have after paying your bank loan.
Compute Mr Coleman income tax : Compute Mr. Coleman's income tax. Assume the taxable year is 2021. Use Individual Tax Rate Schedules and Standard Deduction Table
What is the discounted payback period : 1. Heinlein Inc is considering investing in a project with a cost of $100k. If the project is expected to produce cash flows of $50k in year 1, $140k in year 2,
What amount should be recognized as depreciation expense : The entity accounted for the acquisition as a finance lease for P2,400,000, What amount should be recognized as depreciation expense
How many years will you be able to withdraw all your money : You currently have $1,200 (Present Value) in an account that has an interest rate of 6.5% per year compounded semi-annually (2 times per year). You want to with
Determining the expected market return : The 10-year bond yield in the U.S. is 2%. The beta of the Apple Inc is 1.35. The expected market return based on the S&P 500 Index is 14%. Using CAPM - R(a) = 0
Determine at what value the asset would be recorded : Determine at what value the asset would be recorded in Carl's book and make a journal entry for the asset purchase on July 1, 2020
Evaluate the economic and legal basis for auditing : Evaluate the economic and legal basis for auditing and the applicable auditing standards and reporting requirements and Analyse and communicate knowledge

Reviews

Write a Review

Accounting Basics Questions & Answers

  Prepare the first-year journal entries for the bond issue

Prepare the first-year journal entries for the bond issue and interest expense assuming that the company uses the effective interest method

  What amount should right report as a liability

What amount (if any) should Right report as a liability at the end of the year?

  How much were Superior dividend declarations

The additional paid-in capital account balance increased $4,100 during the year. How much were Superior dividend declarations

  Assignment-budget planning and control

Use the Internet and / or Strayer databases to research budget planning and control. Imagine that the company that you currently work for, have previously worked for, or would like to work for in the future has tasked you with preparing a budget p..

  Problem related to acquistion method

Bailey, inc. buys 60% of the outstanding stock of luebs, inc. Luebs owns a piece at cost of $200000 but was worth $500000 at acquistion date. What value should be attributed to this land in consolidated balance sheet at the date of takeover, Using..

  Determine the actual manufacturing overhead for the year

Work-in-Process Inventory account: Contained charges for overhead of $875,000. Determine the actual manufacturing overhead for the year

  Prepare journal entries to record the transactions

Antonio made an additional investment of cash in amount of $10,500. Prepare journal entries to record the transactions

  What would be the legal and ethical choices of the business

Retail stores will spur sales by allowing generous sales terms. For instance, you might buy a flat screen plasma TV and not have to pay anything until two years

  Federal civil and criminal liabilities under securities act

What federal civil and criminal liabilities under the Securities Act of 1933 could apply in the event that Fancy sells the securities without registration.

  Double declining balance depreciationc

Straight-line depreciationb. Double declining balance depreciationc. Sum of the year's digits depreciationThe company computes depreciation and amortization expense to the nearest whole year.

  State the advantages and disadvantages of payback period

It is based on expected cash flows and provide a measure of liquidity. State the advantages and disadvantages of Payback period

  Where would the acquisition of a new building valued at

1. where would the acquisition of a new building valued at 250000appear on the statement of cash flows if the

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd