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    Quiz - Ppe Depreciation

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    Ana Mae Hernandez
    This document provides information about property, plant, and equipment owned by Lyca, Inc. as of December 31, 2017 and transactions that occurred in 2018. It includes original costs, useful lives, depreciation methods, and salvage values for four assets (L, A, R, and E). It also describes the sale of Asset L in 2018, usage of Asset A, a change to the useful life of Asset R, and an error related to Asset S that was fully expensed in 2017. The document tests accounting knowledge by asking multiple choice questions related to calculating gains/losses on sale, depreciation expense, and adjusting entries.

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    Quiz - Ppe Depreciation

    Uploaded by

    Ana Mae Hernandez
    112 views1 page
    This document provides information about property, plant, and equipment owned by Lyca, Inc. as of December 31, 2017 and transactions that occurred in 2018. It includes original costs, useful lives, depreciation methods, and salvage values for four assets (L, A, R, and E). It also describes the sale of Asset L in 2018, usage of Asset A, a change to the useful life of Asset R, and an error related to Asset S that was fully expensed in 2017. The document tests accounting knowledge by asking multiple choice questions related to calculating gains/losses on sale, depreciation expense, and adjusting entries.

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    QUIZ - PPE DEPRECIATION.docx

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    This document provides information about property, plant, and equipment owned by Lyca, Inc. as of December 31, 2017 and transactions that occurred in 2018. It includes original costs, useful lives, depreciation methods, and salvage values for four assets (L, A, R, and E). It also describes the sale of Asset L in 2018, usage of Asset A, a change to the useful life of Asset R, and an error related to Asset S that was fully expensed in 2017. The document tests accounting knowledge by asking multiple choice questions related to calculating gains/losses on sale, depreciation expense, and adjusting entries.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    112 views1 page

    Quiz - Ppe Depreciation

    Uploaded by

    Ana Mae Hernandez
    This document provides information about property, plant, and equipment owned by Lyca, Inc. as of December 31, 2017 and transactions that occurred in 2018. It includes original costs, useful lives, depreciation methods, and salvage values for four assets (L, A, R, and E). It also describes the sale of Asset L in 2018, usage of Asset A, a change to the useful life of Asset R, and an error related to Asset S that was fully expensed in 2017. The document tests accounting knowledge by asking multiple choice questions related to calculating gains/losses on sale, depreciation expense, and adjusting entries.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    College of Business Administration

    ACTG 109A – APPLIED AUDITING


    Audit of Property, Plant and Equipment

    NAME:_____________________________________________COURSE & YEAR: __________SCORE:______

    Problem 1
    The following data relate on the Plant Assets account of Lyca, Inc. at December 31, 2017:
    Plant Assets
    L A R E
    Original cost P87,500 P127,500 P200,000 P200,000
    Year purchased 2012 2013 2014 2016
    Useful life 10 years 37,500 hours 15 years 10 years

    Salvage value P7,750 P7,500 P12,500 P12,500


    Depreciation SYD Activity Straight-line Double-declining balance
    method

    Note: In the year, an asset is purchased, Lyca, Inc. does not record any depreciation expense on the asset. In
    the year an asset is retired or traded in Lyca, Inc. takes a full year depreciation on the asset.

    The following transaction occurred during 2018:


    a. On May 5, Asset L was sold for P32,500 cash.
    b. On December 31, it was determined that asset A had been used 5,250 hours during 2018.
    c. On December 31, before computing depreciation expense on Asset R, the management of Lyca, Inc.
    decided the useful life remaining from 1/1/18 was 10 years.
    d. On December 31, it was discovered that a plant asset purchased in 2017 had been expensed completely
    on that year. This asset costs P55,000 and has useful life of 10 years and no salvage value. Management
    has decided to use the double-decline balance for this asset, which can be referred to as “Asset S”.

    Based on your audit (disregard taxation):

    1. How much is the gain or loss on sale of Asset L?


    a. P10,250 loss
    b. P10,250 gain
    c. P16,050 gain
    d. P16,050 loss

    2. How much is the depreciation of Asset R for 2018?


    a. P15,000
    b. P21,429
    c. P16,250
    d. P23,214

    3. The adjusting entry to correct the error of failure to capitalize Asset S would include a debit/credit to
    Retained Earnings of
    a. P55,000 debit
    b. P55,000 credit
    c. P44,000 credit
    d. -0-

    4. How much is the adjusted balance of Plant Assets as of December 31, 2018?
    a. P670,000
    b. P527,500
    c. P615,000
    d. P582,500

    5. How much is the total depreciation expense for 2018?


    a. P83,300
    b. P88,479
    c. P82,050
    d. P80,600

    Page 1 “Libyae Lustare”

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