Give journal entry for adjusting profit made due to change in method of depreciation.

Give journal entry for adjusting profit made due to change in method of depreciation.
by

1 Answer

Answer :

It can only be achieved by reducing rate of Dep retrospectively.
by

Related questions

What is retrospective change in depreciation method?

Description : What is retrospective change in depreciation method?

Last Answer : It means change in accounting policy such that it was present from starting.

What is prospective change in depreciation method?

Description : What is prospective change in depreciation method?

Last Answer : Prospective Change means the effect of accounting estimate and new policy is from current date and in future entry.

Give equation for calculating depreciation under reducing balance method.

Description : Give equation for calculating depreciation under reducing balance method.

Last Answer : Dep per annum= (NBV- Salvage)*rate;

Give equation for calculating depreciation under straight-line method.

Description : Give equation for calculating depreciation under straight-line method.

Last Answer : Dep per annum= cost-salvage/useful life;

Is depreciation charged to reduce profits or to reduce the value of asset during a financial year?

Description : Is depreciation charged to reduce profits or to reduce the value of asset during a financial year?

Last Answer : It is charged to reduce value of asset.

Why is depreciation charged even in the year of loss?

Description : Why is depreciation charged even in the year of loss?

Last Answer : Depreciation process does not depend on Profit/Loss, it is mandatory to charge depreciation as expense on Asset is distributed

Why is depreciation charged by business, which makes losses?

Description : Why is depreciation charged by business, which makes losses?

Last Answer : If I hide Depreciation for showing higher profits even if organization is in loss, I may end up paying Tax too. Which will in fact reduce my margin for profit. It will be better to show depreciation and claim tax benefit.

How does physical wear and tear result in depreciation?

Description : How does physical wear and tear result in depreciation?

Last Answer : Physical Wear/Tear tend to worn out the Asset decreasing its productivity over period. Thus, market value decrease for the asset.

Why depreciation is charged to an asset?

Description : Why depreciation is charged to an asset?

Last Answer : As per Accounting Standards, it is a good practice to show the capital expense every period i.e. period wise. Thus, profits will be evenly shared in each period.

What are the features of depreciation?

Description : What are the features of depreciation?

Last Answer : 3.1 Net Book value will decrease for asset. 3.2 Includes loss of value due to usage, obsolescence. 3.3 Continuing Process. 3.4 Must be deducted before calculation taxable profits, as this is an ... then taxable profit is 50000 - 10000 = 40000 INR. 3.5 Does not include any actual cash flows.

What are the different causes of depreciation?

Description : What are the different causes of depreciation?

Last Answer : Wear and Tear; as over a period if asset is utilized it will be damaged and repair may be needed.

What is depreciation?

Description : What is depreciation?

Last Answer : Defined as reduction in value/cost of asset in systematic Manner

Why fixed instalment method is also called as straight-line method?

Description : Why fixed instalment method is also called as straight-line method?

Last Answer : As name suggests the depreciation amount is same each period so it is called fixed installation/straight line.

What is scrap value?

Description : What is scrap value?

Last Answer : Also known as residual/salvage value. The value means below which depreciation cannot be applied or in simpler terms assets useful life is over.

What do you mean by obsolescence?

Description : What do you mean by obsolescence?

Last Answer : When new model for asset procured/installed earlier is released the previous asset market value decreases. This is Obsolescence.

In which case depletion of assets takes place?

Description : In which case depletion of assets takes place?

Last Answer : Just like depreciation, depletion is accounting concept popularly utilized for tangible objects like Mineral Gas, Timber etc. where wear/tear for asset is not there. In these cases the followinf formula is used:

What do you mean by exhaustion of an asset?

Description : What do you mean by exhaustion of an asset?

Last Answer : When useful life for asset is zero or Asset is fully depreciated.

Which of the following conditions identified during fieldwork of an audit is most likely to affect the auditor’s assessment of the risk of misstatement due to fraud? a. Year-end adjusting journal entries. b. Checks for significant amounts outstanding at year-end. c. Missing documents. d. Computer generated documents

Description : Which of the following conditions identified during fieldwork of an audit is most likely to affect the auditor's assessment of the risk of misstatement due to fraud? a. Year-end adjusting ... for significant amounts outstanding at year-end. c. Missing documents. d. Computer generated documents

Last Answer : Missing documents

After the adjusting entries are journalized and posted to the accounts in the general ledger, the balance of each account should agree with the balance shown on the a. adjusted trial balance. b. post-closing trial balance. c. the general journal. d. adjustments columns of the worksheet.

Description : After the adjusting entries are journalized and posted to the accounts in the general ledger, the balance of each account should agree with the balance shown on the a. adjusted trial balance. b. post-closing trial balance. c. the general journal. d. adjustments columns of the worksheet.

Last Answer : a. adjusted trial balance.

If the balance in Merchandise Inventory is larger at the end of the year than at the beginning what adjusting entry would you make for this account?

Description : If the balance in Merchandise Inventory is larger at the end of the year than at the beginning what adjusting entry would you make for this account?

Last Answer : Need answer

A merchandising company using a perpetual system may record an adjusting entry by a. debiting Income Summary. b. crediting Income Summary. c. debiting Cost of Goods Sold. d. debiting Sales.

Description : A merchandising company using a perpetual system may record an adjusting entry by a. debiting Income Summary. b. crediting Income Summary. c. debiting Cost of Goods Sold. d. debiting Sales.

Last Answer : d. debiting Sales.

merchandising company using a perpetual system will make a. the same number of adjusting entries as a service company does. b. one more adjusting entry than a service company does. c. one less adjusting entry than a service company does. d. different types of adjusting entries compared to a service company.

Description : merchandising company using a perpetual system will make a. the same number of adjusting entries as a service company does. b. one more adjusting entry than a service company does. c. one ... than a service company does. d. different types of adjusting entries compared to a service company.

Last Answer : c. one less adjusting entry than a service company does.

Ledger posting is made before journal entry.

Description : Ledger posting is made before journal entry.

Last Answer : State whether the following statement are ‘True or False’ with reason : Ledger posting is made before journal entry.

____________ is the act of transferring an entry from journal to ledger. 

Description : ____________ is the act of transferring an entry from journal to ledger. 

Last Answer : ____________ is the act of transferring an entry from journal to ledger. (a) Journalising (b) Casting (c) Balancing (d) Posting

Why is a journal called the book of prime entry?

Description : Why is a journal called the book of prime entry?

Last Answer : Why is a journal called the book of prime entry?

What is the journal entry for January 4 purchase inventory of 4000 units at 8 per unit on account.?

Description : What is the journal entry for January 4 purchase inventory of 4000 units at 8 per unit on account.?

Last Answer : Need answer

What was clarks entry into his journal when they reached the pacific?

Description : What was clarks entry into his journal when they reached the pacific?

Last Answer : great joy

How do you post a journal entry for a HST refund?

Description : How do you post a journal entry for a HST refund?

Last Answer : Feel Free to Answer

he journal entry to record a return of merchandise purchased on account under a perpetual inventory system would include a. Accounts Payable Sales Returns and Allowances b. Purchase Returns and Allowances Accounts Payable c. Accounts Payable Inventory d. Merchandise Inventory Cost of Goods Sold

Description : he journal entry to record a return of merchandise purchased on account under a perpetual inventory system would include a. Accounts Payable Sales Returns and Allowances b. Purchase Returns and ... Accounts Payable c. Accounts Payable Inventory d. Merchandise Inventory Cost of Goods Sold

Last Answer : d. Merchandise Inventory Cost of Goods Sold

A credit memorandum is used as documentation for a journal entry that requires a debit to a. Sales and a credit to Cash. b. Sales Returns and Allowances and a credit to Accounts Receivable. c. Accounts Receivable and a credit to a contra-revenue account. d. Cash and a credit to Sales Returns and Allowances.

Description : A credit memorandum is used as documentation for a journal entry that requires a debit to a. Sales and a credit to Cash. b. Sales Returns and Allowances and a credit to Accounts Receivable. c. ... and a credit to a contra-revenue account. d. Cash and a credit to Sales Returns and Allowances.

Last Answer : d. Cash and a credit to Sales Returns and Allowances.

he journal entry to record a credit sale is a. Cash Sales b. Cash Service Revenue c. Accounts Receivable Service Revenue d. Accounts Receivable Sales

Description : he journal entry to record a credit sale is a. Cash Sales b. Cash Service Revenue c. Accounts Receivable Service Revenue d. Accounts Receivable Sales

Last Answer : d. Accounts Receivable Sales

The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit a. Accounts Payable. b. Purchase Returns and Allowances. c. Sales. d. Merchandise Inventory.

Description : The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit a. Accounts Payable. b. Purchase Returns and Allowances. c. Sales. d. Merchandise Inventory.

Last Answer : d. Merchandise Inventory.

Which is an example of primary data? A. journal entry B. survey C. census data D. news article

Description : Which is an example of primary data? A. journal entry B. survey C. census data D. news article

Last Answer : C. census data

In a pure monopoly firm a firm can make abnormal profit at the long run equilibrium level due to (a) Price discrimination;(b)Cost effectiveness ; (c) Banned entry of new firms ; (d) Sales promotion

Description : In a pure monopoly firm a firm can make abnormal profit at the long run equilibrium level due to (a) Price discrimination;(b)Cost effectiveness ; (c) Banned entry of new firms ; (d) Sales promotion

Last Answer : (c) Banned entry of new firms ;

The loss on the sale of old furniture is debited to– (A) profit & loss account (B) furniture account (C) trading account (D) depreciation account

Description : The loss on the sale of old furniture is debited to– (A) profit & loss account (B) furniture account (C) trading account (D) depreciation account

Last Answer : Answer: profit & loss account

A limited company makes a net profit of Rs. 2,00,000 after writing off preliminary expenses amounting to Rs. 20,000 and providing for depreciation on assets amounting to Rs. 40,000 and gain of Rs. 10,000 on sale of a piece of machinery. What are the funds from operation ? (A) Rs. 2,00,000 (B) Rs. 2,40,000 (C) Rs. 2,50,000 (D) Rs. 2,60,000

Description : A limited company makes a net profit of Rs. 2,00,000 after writing off preliminary expenses amounting to Rs. 20,000 and providing for depreciation on assets amounting to Rs. 40,000 and gain of Rs. 10,000 on sale of a piece of ... 2,00,000 (B) Rs. 2,40,000 (C) Rs. 2,50,000 (D) Rs. 2,60,000

Last Answer : Answer: Rs. 2,50,000

The following data, relates to manufacturing company for the year 2006-07– Net Profit as per P & L A/c–Rs. 2,40,000; Depreciation–Rs. 80,000; Goodwill written-off– Rs. 40,000, Profit on Sale of Fixed Assets–Rs. 16,000, Proposed Dividend–Rs. 96,000. The fund from operation would be– (A) Rs. 4,40,000 (B) Rs. 4,00,000 (C) Rs. 6,40,000 (D) None of the above

Description : The following data, relates to manufacturing company for the year 2006-07- Net Profit as per P & L A/c-Rs. 2,40,000; Depreciation-Rs. 80,000; Goodwill written-off- Rs. 40,000, Profit on Sale of Fixed Assets-Rs. 16,000, ... ) Rs. 4,40,000 (B) Rs. 4,00,000 (C) Rs. 6,40,000 (D) None of the above

Last Answer : Answer: None of the above

From the information given below, calculate Debt service coverage Ratio– Net profit after interest and Tax Rs. 40,000, Depreciation Rs. 5,000, Rate of Income Tax 50%, 10% Mortgage Debentures Rs. 60,000. Fixed Interest Charges Rs. 6,000, Debenture Redemption Fund Appropriation of Outstanding Debentures 10%. (A) 4•06 times (B) 5•06 times (C) 6•06 times (D) 7•06 times

Description : From the information given below, calculate Debt service coverage Ratio- Net profit after interest and Tax Rs. 40,000, Depreciation Rs. 5,000, Rate of Income Tax 50%, 10% Mortgage Debentures Rs. 60,000. Fixed Interest Charges Rs. 6 ... . (A) 4 06 times (B) 5 06 times (C) 6 06 times (D) 7 06 times

Last Answer : Answer: 4•06 times

Gross profit is equal to 1. selling price minus purchase price 2. selling price minus purchase price plus depreciation 3. depreciation plus unsold stock minus purchase price 4. purchase price minus production cost 5. None of these

Description : Gross profit is equal to 1. selling price minus purchase price 2. selling price minus purchase price plus depreciation 3. depreciation plus unsold stock minus purchase price 4. purchase price minus production cost 5. None of these

Last Answer : selling price minus purchase price

Pick out the wrong statement. (A) Gross margin = net income - net expenditure (B) Net sales realisation (NSR) = Gross sales - selling expenses (C) At breakeven point, NSR is more than the total production cost (D) Net profit = Gross margin - depreciation - interest

Description : Pick out the wrong statement. (A) Gross margin = net income - net expenditure (B) Net sales realisation (NSR) = Gross sales - selling expenses (C) At breakeven point, NSR is more than the total production cost (D) Net profit = Gross margin - depreciation - interest

Last Answer : (C) At breakeven point, NSR is more than the total production cost

Operating profit of a chemical plant is equal to (A) Profit before interest and tax i.e., net profit + interest + tax (B) Profit after tax plus depreciation (C) Net profit + tax (D) Profit after tax

Description : Operating profit of a chemical plant is equal to (A) Profit before interest and tax i.e., net profit + interest + tax (B) Profit after tax plus depreciation (C) Net profit + tax (D) Profit after tax

Last Answer : (A) Profit before interest and tax i.e., net profit + interest + tax (B) Profit after tax plus depreciation

Ashwin purchased a second hand machine for Rs.1 lakh. Over the first year after its purchase. He incurred an expense of Rs.20000 in maintaining it. At the end of the first year he sold it for Rs.80000. Find his profit/loss percentage. If 25% of the total cost price (i.e., purchased price + expenses) is to be deducted on account of depreciation. a)12.5% profit b)12.5% loss c)11 1/9% profit d)11 1/9% loss

Description : Ashwin purchased a second hand machine for Rs.1 lakh. Over the first year after its purchase. He incurred an expense of Rs.20000 in maintaining it. At the end of the first year he sold it for Rs.80000. Find his ... account of depreciation. a)12.5% profit b)12.5% loss c)11 1/9% profit d)11 1/9% loss

Last Answer : d)11 1/9% loss 

In the fund flow statement, depreciation is---------------- a) Deducted from net profit b) Added to net profit c) Sources of working capital d) Ignored

Description : In the fund flow statement, depreciation is---------------- a) Deducted from net profit b) Added to net profit c) Sources of working capital d) Ignored

Last Answer : b) Added to net profit

At the balance sheet date, the balance on the Accumulated Provision for Depreciation Account is A) Transferred to Depreciation Account B) Transferred to the Asset Account C) Transferred to Profit and Loss Account D) Simply deducted from the asset in the Balance Sheet

Description : At the balance sheet date, the balance on the Accumulated Provision for Depreciation Account is A) Transferred to Depreciation Account B) Transferred to the Asset Account C) Transferred to Profit and Loss Account D) Simply deducted from the asset in the Balance Sheet

Last Answer : Answer: D

Drawings made during the year decrease the profit under the Single Entry System.

Description : Drawings made during the year decrease the profit under the Single Entry System.

Last Answer : State True or False with reasons: Drawings made during the year decrease the profit under the Single Entry System.

Under vouching, checking is done of– (A) Journal and Ledger (B) Profit and Loss Account (C) Balance Sheet (D) All of the above

Description : Under vouching, checking is done of– (A) Journal and Ledger (B) Profit and Loss Account (C) Balance Sheet (D) All of the above

Last Answer : Answer: All of the above

The standard method of controlling the output voltage of a 440 volt, 60 Hz, AC generator is accomplished by adjusting the ____________. A. prime mover speed droop B. number of poles C. alternator field excitation D. load on the alternator

Description : The standard method of controlling the output voltage of a 440 volt, 60 Hz, AC generator is accomplished by adjusting the ____________. A. prime mover speed droop B. number of poles C. alternator field excitation D. load on the alternator

Last Answer : Answer: C

Under which method of depreciation does the number of depreciation change every year?

Description : Under which method of depreciation does the number of depreciation change every year?

Last Answer : Under which method of depreciation does the number of depreciation change every year?

Which of the following does not affect cash flows from a proposal: A. Salvage value B. Depreciation amount C. Tax rate change D. Method of project financing

Description : Which of the following does not affect cash flows from a proposal: A. Salvage value B. Depreciation amount C. Tax rate change D. Method of project financing

Last Answer : D. Method of project financing

'P' is the investment made on an equipment, 'S' is its salvage value and 'n is the life of the equipment in years. The depreciation for Rath year by the sum-of year’s digit method will be (A) (P - S)/n (B) 1 - (P/S)1/m (C) (m/n) (P - S) (D) [2 (n - m + 1)/n(n + 1)]. (P - S)

Description : 'P' is the investment made on an equipment, 'S' is its salvage value and 'n is the life of the equipment in years. The depreciation for Rath year by the sum-of year’s digit method will be (A) (P - S)/n (B) 1 - (P/S)1/m (C) (m/n) (P - S) (D) [2 (n - m + 1)/n(n + 1)]. (P - S)

Last Answer : D) [2 (n - m + 1)/n(n + 1)]. (P - S)