On 30 June 2023, the end of the current reporting period, Master Ltd decided, using the information obtained over the past few years, to revise the useful life of a Machine acquired 2 years earlier for $100,000. The useful life was revised from being a total of 10 years to being a total of 14 years. The machine was depreciated on straight-line basis over its useful life and have no residual value. No depreciation has been provided in the current year. Required: i) Prepare the journal entry to account for the change in accounting estimate. ii) Prepare an appropriate supporting note assuming that change in accounting estimate had a material effect on financial performance for the period.

On 30 June 2023, the end of the current reporting period, Master Ltd decided, using the information obtained over the past few years, to revise the useful life of a Machine acquired 2 years earlier for $100,000. The useful life was revised from being a total of 10 years to being a total of 14 years. The machine was depreciated on straight-line basis over its useful life and have no residual value. No depreciation has been provided in the current year. Required: i) Prepare the journal entry to account for the change in accounting estimate. ii) Prepare an appropriate supporting note assuming that change in accounting estimate had a material effect on financial performance for the period.

Name: On 30 June 2023, the end of the current reporting period, Master Ltd d
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Description: On 30 June 2023, the end of the current reporting period, Master Ltd decided, using theinformation obtained over the past few years, to revise the useful life of a Machine acquired 2years earlier for $100,000. The useful life was revised from being a

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 8P: Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of...

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Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.
On 30 June 2023, the end of the current reporting period, Cairns Ltd made a decision, using the information obtained over the past few years, to revise the useful life of an item of plant acquired three years earlier for $3 000 000. The useful life was revised from being a total of eight years to being a total of 12 years. The plant was originally depreciated on the straight-line basis over its useful life and it was expected that the asset would have no residual value. No depreciation has been provided in the current period and tax implications can be ignored. REQUIRED Prepare the journal entry to account for the change in accounting estimate.
On 30 June 2023, the end of the current reporting period, Cairns Ltd made a decision, using the information obtained over the past few years, to revise the useful life of an item of plant acquired three years earlier for $3 000 000. The useful life was revised from being a total of eight years to being a total of 12 years. The plant was originally depreciated on a straight-line basis over its useful life and it was expected that the asset would have no residual value. No depreciation has been provided in the current period and tax implications can be ignored. b) Assuming that the change in accounting estimate had a material effect on financial performance for the period, prepare an appropriate supporting note.
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