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    DEPRECIATION

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    DEPRECIATION

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    DEPRECIATION

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    of 15
    JEPRECIATION: wroblem 47-1 (AICPA Adapted) yn January 1, 2014 Lem Company b contact that required a down avineat y. bought machinery under a payments of P50,000 each, be total pod fe ey monthly : The cash price of the machinery was P1,100,000. The 300,000. has a useful life of 10 years and residual value of P50,000, The entity used straight line depreciation. What amount should ¢ reported as depreciation for 2014? should be . ‘a. 105,000 ‘ : : b. 110,000 c. 125,000 d, 130,000 Problem 47-2 (AICPA Adapted) [ Poe Company disclosed that the depreciation poli FY on machine as follows: _ + A full year depreciation is taken in the year p acquisition, * No depreciation is taken in the year of disposition, : * The estimated useful lifeis five years. - ‘ * Thestraight line method is used. On June 30, 2015, the entity sold for P2,300,000 a machine acquired in 2012 for P4,200,000. The residual value was P600,000, What amount of gain on the disposal should be recorded in 2015? 140,000 . . 260,000 620,000 - 980,000 ° ao rep problem 47-3 (IAA) Monica Company, which has a cal, . . purchascd a new machine for P2,000 000 sid accounting period, Ge entiation N20 Se it for P200,000. The mactine was sold for P1106 oem then el 30,2014. The depreciati policy is.as follows: 000 on September @. Thestraight line method is used, , ’ ‘No depreciation in the year of; ‘acquisiti © A full year depreciation in the year of disposal, What amount should be recognized as gain on di ene On disposal on September 200,000 150,000 100,000 - . - 0 Bo se. . Problem 47-4 (IFRS) Jaine Compan: acquired an aerdplane three years ago. At the ti eine tion, the cost of the jet frame was P46,000,000 sndiee additional cost of the engine was P6,000,000. During the current year the engine was replaced with anew orfe costing P12,000,000. At the time of replacement, the accumulated depreciation to date on the jet frame was P17,500,000,and on the engine was P4,000,000. What amount should be derecognized at the date of replacement? a. 4,000,000 b. 2,000,000 c. 6,000,000 4. 0 problem 47-6 (IFRS) Daisy Company acquired a drilling Machine on October 1, 2012 ata amt of P2,500,000 and depreciated itat25% annum on a straight +2014, © entity spent P: ,000 on upgrade machine in order to improve its efficiency ani the inflow tothe riomic benefits over the machi; : seeciatioe expense should be reco; ep ' ine’s Temaining life. What Bnized for the year ended ber 30, 2015? Septem 1,125,000 b. 625,000 c. 850,000 4, - 875,000 Pprowlera 47-9 (IAA) Spopeieickane- bread ' site method of depreciation equipment was P5,000,000 tthe beginning of 2014 the wn eunet ae tvcumulated deprocinn a tal residual value of PEDO OS 3014 the entity pursed ane 200.00 att te nary i &n equipment for P2,500, - In Jarmary vvalue. At the end of 2014, the entity sold an equim on wit no Fema cost of P1,000,000 and a residual value of ony em onginal This.asset was acquired on January ee for P350,000. 1, Whatis the depreciation for 20147 a 1,625,000 b. 1,875,000 ¢. 1,125,000 i. 975,000 . 2, What is the gain or loss from the derecognition of the asset on _ December 31,2014? : 4. 100,000 gain . “he 150,000, loss: 5 "50,000 Joss. a 0 Problem 47-10 (IAA) Jade Company acquired a new milling machine on April 1, 2008, The machine has a special component that required replacement before the end of the useful life. The asset was originally recorded in two accounts, one representing the main unit and the other for the special component. Depreciation is recorded by the straight line method and residual value is disregarded. On April 1, 2014, the special component is scrapped and is replaced with a similar component. This new component is expected to have a residual value of approximately 20% of cost at the end of the useful life of the main unit, and because of materiality, the residual value will be considered in calculating depreciation. - : Main milling machine; Purchase price in 2008 _ 7,500,000 Residual value « 100,000 Estimated useful life : 10 years First special component: Purchase price . 1,200,000 Residual value » . , 60,000 Estimated useful life . 6 years Second special component: : Purchase price -- ‘ 2,000,000 Residual value — (20% x 2,000,000): 400,000 What is the total depreciation for 2014? - a. 1,100,000 b. 1,087,500 c. 1,350,000 d. 1,175,000 © problem 47-11 (AICPA Adapted) ja Company purchased a Machine on De, ber 1 asset price ofP4.50,000 with tem soo One 0, 2013, the entity paid the required amount oot ae entity vain Pao t for the Machine. On ber I, ’ Pai 000 for delive; of the Dee alent Deceiabiens 1, 2013, it paid 310,000 for incalation machine of the machine. The machine was ready for use on January aod mk 4, It was estimated that the Machine would havea useful life 1,2014. and a residual value of P800,000, Engineering estimate of 5 redhat the useful life in productive units was 200,000. Units oe ly produced during the first two years act Were 30,000 in 2014 in 2015. The entity decided to use the output method and oe 00 in ‘Whaat is the accumulated depreciation of the machine ae ceomtber 3 1.2915? a” 1,560,000 : b. 1,600,000 oo c 960,000 & 600,000" | Problem 47-12 (IFRS) Tania Company purchased a boring machine on January 1, 2014 for P8,100,000. The useful life of the machine is estimated at 3 yearg With aresidual value at the end of this period of P600,000. During the life, the expected units of production are 12,000 units in 2014, 7,099 units in 2015, and 6,000 units in 2016. What is the depreciation expense for 2015 using the most appropriate depreciation method? 2,100,000 2,268,000 3,600,000 1,800,000: poop Prediem 47-14(AICPA Adapted) OnApril 1, 2014, Kew Company purchased new machinery fe | ery for B, 300,000. The machinery has an estimated useful life of five years with residual value of P300,000. Depreciation is computed by the sum of the years’ digits method. What is the accumulated depreciation on December 31, 20157 a. 1,600,000 & 1,800,000 @ 1,200,000 @ 1,000,000 Problem 47-15 (IAA) On September 20, 2014, Klaudine Company purchased Machinery for P7,600,000. Residual value was estimated at P400,000, machinery is depreciated over eight years using the sum of years’ igity niethod. Depreciation is computed on the basis of the nearest full mont, What amount should be recorded as depreciation for 2015? a. 1,636,120 ~b. 1,553,800 c. 1,550,000 d. 1,400, “000. problem 47-23 (PHILCPA Adapted) ary 2014, Naval Company Purchased ¢ qui 16,000 000. The equipm of P6, ent has q Useful life Of eight years with residual value of P600,000, Th © entity considered Various m eciation and selected the Sum of years’ digits method. On platen 31,2015, what is the accumulated depreciation? Degen 2 hehe Why P750,000 less than under the pn line method » ‘ than under the double i >. ee

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