On January 1, 2021, a company acquired an expensive equipment for 10,000,000. The equipment has a...

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On January 1, 2021, a company acquired an expensive equipment for 10,000,000. The equipment has a useful life only of 10 years with a residual value of 1,000,000. The entity uses a double declining balance method for depreciation. Compute: 1. Double declining rate of depreciation: 2. Depreciation for 2021 3. Accumulated Depreciation on December 31, 2022 4. Carrying amount of the equipment on December 31, 2023 5. Carrying amount of the equipment on December 31, 2030 On December 1, 2020, a company obtained a 12%, 5,000,000 loan from a bank to finance the construction of a building on beginning March 31, 2021. Due to increase in prices of construction materials, the company anticipated that the 5,000,000 loan is not sufficient to finance the construction next year. Thus, it used two outstanding loans at the beginning of the year 2020 used for general purposes that have total principal and interest rates of 8,000,000 at 10% and 4,000,000 at 7% respectively. The building was completed and ready for use on September 30, 2022. The company uses calendar year as its reporting period. The loans were still outstanding at the end of 2022. Expenditures for the construction of the building were as follows: 2021 February 1 March 31 June 1 September 30 November 1 Total 3,000,000 1,800,000 2,700,000 1,080,000 8,580,000 2022 2,025,000 3,600,000 5,625,000 Required: Average expenditures for 2021 Average interest to be used Borrowing cost capitalized for 2021 Total cost of the building on December 31, 2021 Borrowing cost expensed for 2021 Average expenditures for 2022 Borrowing cost capitalized for 2022 Total cost of the building on September 30, 2022 Borrowing cost expensed for 2022 On January 1, 2021, a company acquired an expensive equipment for 10,000,000. The equipment has a useful life only of 10 years with a residual value of 1,000,000. The entity uses a double declining balance method for depreciation. Compute: 1. Double declining rate of depreciation: 2. Depreciation for 2021 3. Accumulated Depreciation on December 31, 2022 4. Carrying amount of the equipment on December 31, 2023 5. Carrying amount of the equipment on December 31, 2030 On December 1, 2020, a company obtained a 12%, 5,000,000 loan from a bank to finance the construction of a building on beginning March 31, 2021. Due to increase in prices of construction materials, the company anticipated that the 5,000,000 loan is not sufficient to finance the construction next year. Thus, it used two outstanding loans at the beginning of the year 2020 used for general purposes that have total principal and interest rates of 8,000,000 at 10% and 4,000,000 at 7% respectively. The building was completed and ready for use on September 30, 2022. The company uses calendar year as its reporting period. The loans were still outstanding at the end of 2022. Expenditures for the construction of the building were as follows: 2021 February 1 March 31 June 1 September 30 November 1 Total 3,000,000 1,800,000 2,700,000 1,080,000 8,580,000 2022 2,025,000 3,600,000 5,625,000 Required: Average expenditures for 2021 Average interest to be used Borrowing cost capitalized for 2021 Total cost of the building on December 31, 2021 Borrowing cost expensed for 2021 Average expenditures for 2022 Borrowing cost capitalized for 2022 Total cost of the building on September 30, 2022 Borrowing cost expensed for 2022

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Here are the answers 1 Double declining rate of depreciation Since the useful life of the equipment ... View the full answer