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Sladkaya [172]
3 years ago
9

On July 1, 2019, Pharoah Company purchased new equipment for $80,000. Its estimated useful life was 8 years with a $16,000 salva

ge value. On January 1, 2022, before making its depreciation entry for 2022, the company estimated the remaining useful life to be 10 years beyond December 31, 2022. The new salvage value is estimated to be $5,000. Compute the revised annual depreciation on December 31, 2022.
Business
1 answer:
Eva8 [605]3 years ago
3 0

Answer:

Pharoah Company

Revised Annual Depreciation on Dec. 31, 2022:

= Depreciable amount divided by 10 years

= $55,000/10 = $5,500

Explanation:

a) Data:

July 1, 2019: Equipment Purchase $80,000

Estimated useful life = 8 years

Salvage value = $16,000

b) Computations:

Depreciable amount = $64,000 ($80,000 - 16,000)

Annual Depreciation Expense = $8,000 ($64,000/8)

Six months Depreciation Expense = $4,000 ($8,000/2)

c) Accumulated Depreciation from July 1, 2019 to Jan. 1, 2022:

July 1, 2019 to Dec. 31, 2019 = $4,000

Jan. 1, 2020 to Dec. 31, 2020 = $8,000

Jan. 1, 2021 to Dec. 31, 2021 = $8,000

Total  =      $20,000

d) Revision of Estimates:

Jan. 1, 2022, Book Value = Cost minus Accumulated Depreciation ( $80,000 - $20,000) = $60,000

Re-estimated salvage = $5,000

Depreciable amount  =$55,000

Remaining useful life = 10 years

Annual Depreciation Expense = $5,500 ($55,000/10)

e) Depreciation is an accounting estimate used as a way of expensing the cost of a fixed asset over its useful life.  It is in line with the accrual concept and matching principle of generally accepted accounting principles, which require expenses and revenues to be matched to the related period, expenses and revenues.  It is based on the judgement of management and can be revised in line with changing circumstances and judgements.  There are many methods for accounting for depreciation, including the straight-line as above, the unit of production method, double declining, sum of the years digit method, and accelerated methods like the MACRS or Modified Accelerated Cost Recovery System for tax accounting.

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Push button shows a person that they have choices in their lives about which stimuli they pay attention to and remember.

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3 years ago
Before the year began, Murphy Manufacturing estimated that manufacturing overhead for the year would be $176,000 and that 13, 70
saveliy_v [14]

Answer:

A. $194, 035

Explanation:

Predetermined Manufacturing overhead Rate = Estimated total overheads / Estimated direct labor hours

Predetermined Manufacturing overhead Rate = $176,000 / 13,700

Predetermined Manufacturing overhead Rate = $12.85 /  direct labor hour

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Manufacturing overhead allocated = $12.85x 15,100

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The correct option is A. $194, 035

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Which repayment plan will you be placed on automatically?
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2 years ago
For each of the following scenarios, determine whether the situation described can be attributed to the real-balances effect, th
aksik [14]

Answer:

A)Interest-rate effect

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Explanation:

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Russell Inc. had sales of $2,300,000 for the first quarter of 2017. In making the sales, the company incurred the following cost
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Answer:

$527,000

Explanation:

Preparation of a CVP income statement for the quarter ended March 31, 2017.

Russell Inc.income statement for the quarter ended March 31, 2017.

Sales $2,300,000

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Cost of goods sold $940,000

Selling expenses 74,000

Administrative expenses 96,000

Total Variable Expenses 1,110,000

Contribution Margin 1,190,000

($2,300,000-$1,110,000)

FIXED EXPENSES

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Administrative expenses 145,000

Total Fixed Expenses 663,000

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(1,190,000-663,000)

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