Lim, Alix BSA- 3

Acctg 5aN

Problem 1 Blue Company Answer: B. 600,000

Cost 6,000,000
Accumulated Depreciation
(6,000,000/6 x 3) (3,000,000 )
Carrying Amount, Jan. 1,2018 3,000,000
Divided by remaining years (8-3) 5
Depreciation, 2018 ₱600,000

Problem 2 Flax Company Answer: A. 2,920,000

Acquisition Cost 5,280,000

Acc. Depreciation
(5,280,000/8 x 3) (1,980,000 )
Carrying Amount, Jan. 1, 2018 3,300,000
Residual Value (480,000 )
Carrying Amount 2,820,000
Divided by remaining years (6-3) 3
Depreciation, Dec. 31,2018 940,000
Acc. Depreciation, Jan.1, 2018 1,980,000
Acc. Depreciation, Dec. 31,2018 ₱2,920,000

Problem 3 Orca Company Answer: C. 600,000 increase

FIFO Inventory, Jan. 1, 2018 ₱7,100,000

Weighted Average Inventory, Jan. 1, 2018 7,700,000
Cumulative effect of the accounting change, 2018 ₱600,000 increase

Problem 4 Goddard Company Answer: A. 500,000 decrease

FIFO Inventory, Jan. 1, 2018 ₱8,300,000

Weighted Average Inventory, Jan. 1, 2018 7,800,000
Cumulative effect of the change in accounting policy ₱500,000 decrease