North Ltd. purchased a building in 20X5 for $1,200,000. Straight-line depreciation was used, with a useful...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
North Ltd. purchased a building in 20X5 for $1,200,000. Straight-line depreciation was used, with a useful life of 40 years and a residual value of $200,000. A full year of depreciation was charged in 20X5. In 20X8, the company decided to switch depreciation methods to declining balance, using a rate of 10%. The tax rate is 30%. Required: 1. Assume this is a change in estimate, and calculate 20X8 depreciation expense. Depreciation expense 2. Assume this is a change in policy, and calculate 20X8 depreciation expense and the cumulative effect of the change on 20X8 opening retained earnings. Depreciation expense Cumulative effect North Ltd. purchased a building in 20X5 for $1,200,000. Straight-line depreciation was used, with a useful life of 40 years and a residual value of $200,000. A full year of depreciation was charged in 20X5. In 20X8, the company decided to switch depreciation methods to declining balance, using a rate of 10%. The tax rate is 30%. Required: 1. Assume this is a change in estimate, and calculate 20X8 depreciation expense. Depreciation expense 2. Assume this is a change in policy, and calculate 20X8 depreciation expense and the cumulative effect of the change on 20X8 opening retained earnings. Depreciation expense Cumulative effect
Expert Answer:
Answer rating: 100% (QA)
1 Depreciation expense Cost Residual value x 1 1 Useful life x Depreciation rate 1200000 200000 x 1 ... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0176509736
10th Canadian Edition, Volume 1
Authors: Donald Kieso, Jerry Weygandt, Terry Warfield, Nicola Young,
Posted Date:
Students also viewed these accounting questions
-
On January 1, a machine with a useful life of five years and a salvage value of $25,000 was purchased for $125,000. What is the depreciation expense for year 2 under straight-line depreciation?...
-
For the current year, Accord Company decided to switch from the indirect method to the direct method for reporting cash flows from operating activities on the statement of cash flows. Will the change...
-
For the current year, Packers Company decided to switch from the indirect method to the direct method for reporting cash flows from operating activities on the statement of cash flows. Will the...
-
Consider an increasing marginal-cost depletable resource with no effective substitute. (a) Describe, in general terms, how the marginal user cost for this resource in the earlier time periods would...
-
Sue and Sam Fielder own Club Fab. From its inception Club Fab has sold merchandise on either a cash or credit basis, but no credit cards have been accepted. During the past several months, the...
-
A supermarket is open B60 days per year. Daily use of cash register tape averages 10 rolls, Normally distributed, with a standard deviation of two roils per day. The cost of ordering tapes is $10 per...
-
Refer to information in Brief Exercise 18-33. Prepare a reconciliation between Baltimore Inc.'s effective and statutory tax rates. Exercise 18-33 Baltimore Inc. reported pretax GAAP income of \(\$...
-
The financial statements of P&G are presented in Appendix 5B or can be accessed at the books companion website, www.wiley.com/college/kieso. Instructions Refer to P&Gs financial statements and the...
-
I need help with the given quesiton. You expect to have $12,000 in one year. A bank is offering loans at 5.0% interest per year. How much can you borrow today? Today you can borrow $ . (Round to the...
-
A farm couple are sending their three children to the market to sell 90 apples with the objective of educating them about money and numbers. Karen, the oldest, carries 50 apples; Bill, the middle...
-
4) [18] Combustion products flow through the nozzle of a jet engine operating at steady state, with inlet and exit properties shown in the table. Find the mass flowrate through the nozzle, the inlet...
-
A 39.0 g particle is released from rest at x = A. What is the speed of the particle at x = C? Assume mechanical energy is conserved. U (J) 6 S 3 2 1 A B x C D
-
Write snippet to add two labels and two buttons in tabular format. (just the part of code that can create tabular allignment of nodes and add to scene? label1 Button1 label2 Button 2
-
Two parties enter a swap agreement with a notional principal of $10,000 to be exchanged in a year. The interest rate in the market is 6%. a. The party that pays the fixed rate also pays $100 at...
-
Explain the legal and ethical issues surrounding the payment of trailing commissions to finance and mortgage brokers and advisers (Explain the legal environment including disclosure and compliance...
-
. 1. Explain, that capital expenditures help increase assets, yet other cash flows like taxes and paying salary do not do so but create an instant expense on the income statement, which then...
-
Lannister is planning to invest in a 10-year bond with a face value of $1,000 that pays a 8.5 percent coupon (paying semi-annually). Assume that coupon payments will be semi-annual. The current...
-
According during to the IRS, individuals filing federal income tax returns prior to March 31 received an average refund of $1,088 in 2018. Consider the population of "last-minute" filers who mail...
-
Brookfield Properties Corporation reported net income of $1,896 million for the year ended December 31, 2011, which is up 12.5% from the prior year. The company owns, develops, and manages North...
-
Soon after December 31,2014, the auditor of Morino Manufacturing Corp. asked the company to prepare a depreciation schedule for semi trucks that showed the additions, retirements, depreciation, and...
-
Joseph Kiuvik is reviewing the cash accounting for Connolly Corporation, a local mailing service. Kiuvik's review will focus on the petty cash account and the bank reconciliation for the month ended...
-
The question is the same as in problem 5 , but now the simple implicit scheme (6.34) is used. Consider two situations. a) The expected error must be less than \(\sim 10^{-4}\) for the entire...
-
Compare the schemes introduced for the linear convection equation. a) Simple explicit schemes (7.6), (7.7), and (7.8) b) Simple implicit scheme (7.19) c) Leapfrog scheme (7.21) d) Lax-Wendroff scheme...
-
Repeat Problem 7.1 for the following schemes applied to the one-dimensional heat equation. a) Simple explicit scheme \((7.28)\) b) Simple implicit scheme \((7.32)\) c) Crank-Nicolson scheme (7.34)...
Study smarter with the SolutionInn App