Popeye Company purchased a machine for $370,000 on January 1, 2023. Popeye depreciates machines of this type by the straight-line method over a five-year period using no salvage value. Due to an error, no depreciation was taken on this machine in 2023. Popeye discovered the error in 2024. The tax rate is 25%. What amount should Popeye record as depreciation expense for 2024?

Popeye Company purchased a machine for $370,000 on January 1, 2023. Popeye depreciates machines of this type by the straight-line method over a five-year period using no salvage value. Due to an error, no depreciation was taken on this machine in 2023. Popeye discovered the error in 2024. The tax rate is 25%. What amount should Popeye record as depreciation expense for 2024?

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 66P: At the end of 2020, Magenta Manufacturing Company discovered that construction cost had been...

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Popeye Company purchased a machine for $370,000 on January 1, 2023. Popeye depreciates machines of this type by the straight-line method over a five-year period using no salvage value. Due to an error, no depreciation was taken on this machine in 2023. Popeye discovered the error in 2024. The tax rate is 25%. What amount should Popeye record as depreciation expense for 2024?
Quigley Co. bought a machine on January 1, 2022, for $2,800,000. It had a $240,000 estimated residual value and a ten-year life. An expense account was debited on the purchase date. Quigley uses straight-line depreciation. This was discovered in 2024. Prepare the entries related to the machine for 2024. Ignore taxes. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation (To correct the error) (To record depreciation expense) Debit Credit
Popeye Company purchased a machine for $350,000 on January 1, 2020. Popeye depreciates machines of this type by the straight-line method over a five-year period using no salvage value. Due to an error, no depreciation was taken on this machine in 2020. Popeye discovered the error in 2021. What amount should Popeye record as depreciation expense for 2021? The tax rate is 25%. O O O O $105,000. $52,500. $70,000. $140,000.
Popeye Company purchased a machine for $340,000 on January 1, 2020. Popeye depreciates machines of this type by the straight-line method over a five-year period using no salvage value. Due to an error, no depreciation was taken on this machine in 2020. Popeye discovered the error in 2021. What amount should Popeye record as depreciation expense for 2021? The tax rate is 25%. Multiple Choice $102,000. $136,000. $51,000. $68,000.
Lehman Corporation purchased a machine on January 2, 2017, for $4,000,000. The machine has an estimated 5-year life with no salvage value. The straight-line method of depreciation is being used for financial statement purposes and the following MACRS amounts will be deducted for tax purposes: 2017 $800,000 2020 $460,000 2018 $1,280,000 2021 $460,000 2019 $768,000 2022 $232,000 Assuming an income tax rate of 30% for all years, the net deferred tax liability that should be reflected on Lehman's balance sheet at December 31, 2018 be a. $144,000 b. $134,400 c. $9,600 d. $0
Quigley Co. bought a machine on January 1, 2019 for $2,800,000. It had a $240,000 estimated residual value and a ten-year life. An expense account was debited on the purchase date. Quigley uses straight-line depreciation. This was discovered in 2021. Instructions Prepare the entry or entries related to the machine for 2021. Ignore taxes.
On January 1, 2016, Margo Company acquired machinery at a cost of $160,000. This machinery was being depreciated by the double-declining-balance method over an estimated life of five years with no salvage value. At the beginning of 2018, Margo changed to and could justify straight-line depreciation. Margo's tax rate is 30 percent. What is the amount of depreciation expense to be included in 2018 net income?
Fontaine Ltd. acquired a machine for $600,000 on January 1, 2022. The machine has a salvage value of $10,000 and a five-year useful life. Fontaine expects the machine to run for 15,000 machine hours. The machine was actually used for 4,800 hours in 2022 and 3,150 hours in 2023. What amount would Fontaine record as depreciation expense for 2022 if the units-of-production method were used? (Note: Round your answer to the nearest hundred dollars.)
On May 1, 2022, Vontsira purchased equipment for $16,526,000 cash. The production team estimated that the equipment would last for 12 years and have a $826,000 salvage value. Unfortunatelydue to an error, no depreciation was recorded in 2022. The error was corrected when it was discovered at the end of 2023. Which of the following accounts will not be affected by the correction, assuming they use straight-line depreciation? (RE&CF 3) Depreciation Expense Accumulated Depreciation All of these accounts will be affected . Retained Earnings Which of the following is a counterbalancing error? (RE&CF 2) Recording research and development costs as expenses Recording a full year of straight line depreciation when PPE was purchased in August Recording permanent tax differences in deferred taxes Recording interest expense as a decrease to notes payable
Fontaine Ltd. acquired a machine for $600,000 on January 1, 2022. The machine has a salvage value of $10,000 and a five-year useful life. Fontaine expects the machine to run for 15,000 machine hours. The machine was actually used for 4,800 hours in 2022 and 3,150 hours in 2023. What amount would Fontaine record as depreciation expense for the year ending December 31, 2023, if the double declining balance method were used?
Jackson Company purchased $50,000 in equipment on July 1, 2021. The equipment had a 10-year useful life (no salvage value) and Jackson normally uses the straight-line method of depreciation with no special first year conventions. The equipment was written off to office expense when purchased, but the error was not discovered until near the end of 2022 (this year is still open). What is the effect of the error on the 2021 and 2022 net income? OA OB OC OD 2021 net income Too high $50.000 2021 net income Too low $50,000 2021 net income Too high $45,000 2021 net income Too low $47,500 2022 net income Too high $5,000 2022 net income Too low $5,000 Lerner 2022 net income Too low $5,000 2022 net income Too high $5,000
Oriole Corporation purchased a machine on January 2, 2020, for $4300000. The machine has an estimated 5-year life with no salvage value. The straight-line method of depreciation is being used for financial statement purposes and the following MACRS amounts will be deducted for tax purposes: 2020 $860000 2023 $494500 2021 1376000 2024 494500 2022 825600 2025 249400 Assuming an income tax rate of 20% for all years, the net deferred tax liability that should be reflected on Oriole's balance sheet at December 31, 2021 be $103200 $73100 $0 $6880