Reference no: EM132630014

Questions - The following questions are different. This topic is all about the depreciation of an asset.

Q1. Cage Company purchased on a noncurrent asset with a useful life of 10 years on January 1, 2019 for P13,000,000. On December 31, 2019, the amount the entity would receive from the disposal of the asset if it was already of the age and in the condition expected at the end of the useful life was estimated at P1,400,000. Inclusive of inflation the actual amount expected to be received on disposal was estimated at P1,800,000. What is the accumulated depreciation on December 31, 2023?

Q2. Rush Company purchased a machine on January 1, 2019 for P16,200,000. The useful life of the machine is estimated at 3 years with a residual value at the end of this period of P1,200,000. During the useful life, the expected units of production from the machine are 12,000 units in 2019, 7,000 units in 2020 and 6,000 units in 2021. What is the depreciation for 2020 using the most appropriate depreciation method?

Q3. On January 1, 2019, Nicholson Company purchased a new machine for P8,000,000. The new machine has an estimated useful life of eight years and the residual value was estimated P800,000. Depreciation was computed on the sum of the years' digits method. What is the carrying amount of the machine on December 31, 2020?

Q4. On January 1, 2017 Benigni Company acquired equipment to be used in the manufacturing operations. The equipment has an estimated useful life of 10 years and an estimated residual value of P100,000. The depreciation applicable to this equipment was P480,000 for 2019 computed under the sum of years' digits method. a. What was the acquisition cost of the equipment? What is the carrying amount of the equipment on 12/31/19?

Q5. On April 1, 2019, Spacey Company purchased new machinery for P6,000,000. The machinery has an estimated useful life of five years and depreciation is computed by the sum of years' digits method. a. What is the accumulated depreciation of the machinery on March 31, 2021? What is the carrying amount of the asset on 12/31/2019?

Q6. Washington Company purchased equipment which was installed and put into service January 1, 2019 at a total cost of P2,560,000. Residual value was estimated at P160,000. The equipment is being depreciated over eight years by the double declining balance method. What amount of depreciation should be recorded for 2020? What is the carrying amount of the equipment on 12/31/20?

Q7. On January 1, 2019, Brody Company acquired an equipment to be used in operations. The equipment has useful life of 8 years and residual value of P600,000. The depreciation applicable to equipment was P1,800,000 for 2020 computed under the double declining balance method. What was the acquisition cost of the equipment? What is the carrying amount of the equipment on 12/31/21?

Q8. Based on the following schedule of depreciable assets by Penn Company on January 1, 2019 : Asset X has a carrying amount of 2,880,000, residual value of 800,000 and accumulated depreciation of 5,120,000. Asset Y has accumulated depreciation of 2,880,000, depreciable amount of 3,600,000 and cost of 4,000,000. Asset Z has cost of 5,600,000, carrying amount of 2,912,000 and residual value of 1,020,000. The useful life of each asset is 5 years. Assets X was acquired in 2017 while Assets Y and Z were acquired in 2016. The entity takes a full depreciation in the year of acquisition and no depreciation in the year of disposition. Asset Z was sold for P3,400,000 on June 30, 2019. Asset X is depreciated under the double declining method. 41. What is the depreciation of asset X for 2019? What is the depreciation of Asset Y assuming same method in prior years? What is the gain on sale of asset Z? What is the total carrying amount of depreciable assets on 12/31/19?

Q9. Foxx Company purchased equipment on January 1, 2019 for P10,000,000. The equipment had an estimated 5-year useful life. The accounting policy for 5-year assets is to use the 200% double declining balance method for the first two years of the asset's life and then switch to straight line depreciation. On December 31, 2019, what amount should be reported as accumulated depreciation?

Q10. Seymour Company purchased a machinery on January 1, 2016 for P14,400,000. The machinery had useful life of 10 years with no residual value and was depreciated using the straight line method. In 2019, a decision was made to change the depreciation method from straight line to sum of the years' digits. The estimate of useful of useful life and residual value remained unchanged. What is the depreciation for the current year? What is the carrying amount of the machinery on 12/31/19?

Q11. On January 1, 2017, Whitaker Company purchased for P4,800,000 a machine with a useful life of ten years and no residual value. The machine was depreciated by the double declining balance method. The entity changed to the straight line method on January 1, 2019. What is the depreciation for the current year? What is the carrying amount of the machine on 12/31/19?