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Problem Solving

The document presents a series of accounting problems related to the depreciation of machinery and equipment for various companies. Each problem includes the purchase price, depreciation method, and changes in estimated useful life or residual value, requiring calculations of accumulated depreciation or depreciation expense for specific years. The document lists multiple-choice answers for each problem, indicating the complexity of accounting for fixed assets.

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Aiah Lampitoc
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12 views2 pages

Problem Solving

The document presents a series of accounting problems related to the depreciation of machinery and equipment for various companies. Each problem includes the purchase price, depreciation method, and changes in estimated useful life or residual value, requiring calculations of accumulated depreciation or depreciation expense for specific years. The document lists multiple-choice answers for each problem, indicating the complexity of accounting for fixed assets.

Uploaded by

Aiah Lampitoc
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

PROBLEM SOLVING:

1. On January 1, 2021, Nichols Company purchased a machine for P2,640,000 and


depreciated it by straight line using an estimated life of 8 years with no residual
value.
On January 1, 2024, the entity determined that the machine had a useful life of 6
years from the date of acquisition with a residual value of 240,000,
What is the accumulated depreciation on December 31, 20247
a. 1,460,000 c. 1,600,000
b. 1,540.000 d. 1,760,000

2 Drenz Company purchased a machine on January 1, 2021 for 3,000,000. At the


date of acquisition, the machine had a life of 6 years with no residual value. The
machine is being depreciated on a straight line basis. On January 1, 2024, the entity
determined that the machine had a useful life of 5 years from the date of
acquisition with residual value of P100,000
What is the depreciation for 20247
a. 700,000 c. 750,000
b. 500,000 d. 600,000

3. On January 1, 2022, Josiah Company purchased for $2,400,000 a machine with a


useful life of 10 years and no residual value. The machine was depreciated by the
double declining balance method and the carrying amount of the machine was
1,536,000 on December 31, 2023. The entity changed to the straight line method
on January 1, 2024
What is the depreciation for 2024
a.153,600 c. 240,000
b. 307.200 d. 192.000

4. On January 1, 2023, Bray Company purchased a machine for 2,750,000. The


machine was depreciated using the sum of years' digits method based on a useful
life of 10 years with no residual value. On January 1, 2024, the entity changed to the
straight line method of depreciation. c. 240,000 What is the depreciation for 20242
c. 250.000 a. 180,000
d. 275,000 b. 220,000

5. Luke Company purchased equipment on January 1, 2022 for $5,000,000. The


equipment had an estimated 5-year service life. The policy for 5-year assets is to
use the 200% double declining balance method for the first two years and then
switch to the straight line depreciation method.

What amount should be reported as accumulated depreciation on December 31,


2024
a.3,000,000 c. 3,920,000
b. 3,800,000 d. 4,200,000
[Link] Company purchased a machinery on January 1, 2021 for P7,200,000. The
machinery has a useful life of 10 years with no residual value and was depreciated
using the straight line method in 2024, was made value remained unchanged to
change the depreciation method from straight line to sum of or years' dige method
in 2024, a decision was made
What is the depreciation for 2024?
a. 1,260.000 c. 916,360
b. 1,440,000 d. 720,000
7. On January 1, 2022, Jordan Company purchased for P4,800,000. The machinery
has a useful life of 10 years and a residual value of P200,000. The machine was
depreciated by the double declining balance and the carrying January 1, 2024. The
residual value did not change. amount of the machine was P3,072.000 on December
31, 2023. The entity changed to the straight line method on

What is the depreciation expense for 20247


c. 460,000 a. 287,200
d. 359,000 b. 384,000

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