PROBLEMS Problem 10-1 (AICPA Adapted) i hased a : On January 1, 2016, Flair Company purchased a machin, P2, 640,000 and depreciated it by the straight line y estimated life of 8 years with no residual value. te On January 1, 2019, the entity determined that the mag had a useful life of 6 years from the date of acquisition With, residual value of P240,000. What is the accumulated depreciation on December 31, 201y a. 1,460,000 b. 1,540,000 c. 1,600,000 d. 1,760,000 Problem 10-2 (IFRS) On January 1, 2015, Roma Company purchased equipmey for P4,000,000. The equipment has a useful life of 10 yean and a residual value of P400,000. On January 1, 2019, the entity determined that the usefi | life of the equipment was 12 years from the date of acquisition and the residual value was P480,000. 1. What is the carrying amount of the equipment on January 1, 2019? ‘ 2,560,000 2,920,000 2,400,000 2,800,000 ao rp What is the depreciation of the equipment for 2019? a. 175,000 b. 260,000 c. 360,000 d. 300,000 198problem 40-3 (AICPA Adapted) pawn Company purchased a machine on January 1, 2016 for 3 000,000. At the date of acquisition, the machine had a life f six years with no residual value. The machine is being fepreciated on a straight line basis. On January 1, 2019, the entity determined that the machine had a useful life of five years | from the date of acquisition with residual value of P100,000. What is the depreciation for 2019? | 4, 700,000 | p, 500,000 |<. 750,000 d 600,000 problem 10-4 (AICPA Adapted) Qn January 1, 2017, Zee Company purchased for P2,400,000 amachine with a useful life of ten years and no residual value. The machine was depreciated by the double declining balance method and the carrying amount of the machine was P1,536,000 on December 31, 2018. The entity changed to the straight line method on January 1, 2019. What is the depreciation for 2019? a. 153,600 b. 307,200 c. 240,000 |. 192,000 . Problem 10-5 (AICPA Adapted) ~ |" ~'! On January 1, 2018, Kevin Company purchased a machine for P2,750,000. 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, 2019, the entity changed to the straight line method of depreciation. What is the depreciation for 2019? a. 180,000 b. 220,000 2 ©. 250,000 4. 275,000 199Problem 10-6 (AICPA Adapted) Turtle Company purchased equipment on January 1 for 5,000,000. The equipment had an estimated 5-yeay Cl life. The policy for 5-year assets is to use the 200% dou declining balance method for the first two years and te switch to the straight line depreciation method. en What amount should be reported as accumulated depreciatiy, on December 31, 2019? m a. 3,000,000 b. 3,800,000 c. 3,920,000 d. 4,200,000 Problem 10-7 (IAA) . Xavier Company purchased a machinery on January 1, 2016 for P7,200,000. The machinery has a useful life of 10 yearg 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 years digits. The estimate of useful life and residual value remained unchanged. What is the depreciation for 2019? ‘a. 1,260,000 b. 1,440,000 c. 916,360 d. 720,000 Problem 10-8 (AICPA Adapted) On January 1, 2017, Brazilia Company purchased for P4,800,000 a machine with a useful life of ten years anda residual value of P200,000. The machine was depreciated by - the double declining balance. The entity changed to the straight line method on January 1, 2019. The residual value did not change. What is the accumulated depreciation on December 31, 2019? a. 1,728,000 b. 2,087,000 c. 1,380,000 d. 2,112,000 4problem 10-9 (IAA) n January 1, 2018, London Company purchased a large quantity of personal computers. The cost of these computers 7s P6,000,000. On the date of purchase, the management estimated that the computers would last approximately four years and would ve a residual value at that time of P600,000. The entity used the double declining balance method. During January 2019, the entity realized that. technological advancements had made the computers virtually obsolete and that they would have to be replaced. The management changed the remaining useful life of the computers to two years. What is the depreciation expense for 2019? a. 3,000,000 b. 2,400,000 6: d. 1,200,000 Problem 10-10 IAA) Canyon Company decided at the beginning of 2019 to decrease the estimated useful life of the patent from 10 years to8 years. The patent was purchased on January 1, 2014 for P3,000,000 with estimated residual value of zero. The entity decided on January 1, 2019 to change the depreciation method from accelerated method to straight line. On January 1, 2019, the cost of the equipment is P8,000,000 and the accumulated depreciation is P3,400,000. The remaining useful life of the equipment on January 1, 2019 is 10 years and the residual value is P200,000. What is the total charge against 2019 income as a result of the accounting changes? _ a. 940,000 PW- pate? . b. 960,000 . | ¢. 627,500 -amt 4. 647/500