Tugas 3

The cost of equipment purchased by PT Toraja, on June 1, 2014 is Rp 750.000.000. It is

estimated that the machine will have a Rp 50.000.000 residual value at the end of its service life.

Its service life is estimated at 8 years. Its total working hours are estimated at 50,000 and its total

production is estimated at 600,000 units. During 2014, the machine was operated 7000 hours and

produced 55.000 units. During 2015, the machine was operated 6500 hours and produced 50.000

units.

Required : Compute depreciation expense on the machine for the year ending December 31,

2014, and the year ending December 31, 2015, using the following methods :

1. Straight line

2. Units of output

3. Working Hours

4. Sum-of-the-years-digits.

5. Declining-balance (twice the straight line).

Tugas 4

Bon. Co purchased a patent for Kiddy Co. for $360.000 on July 1, 2007. Expenditures of

$140.000 for successful litigation in defense of the patent were on July 1, 2010. Sisco estimates

that the useful life of the patent will be 20 years from the date of acquisition. At the beginning of

2011, based on new market research, Bon Co. determines that the recoverable amount of the

patent is $297.000.

Instructions

1. Prepare the journal entry to record the purchase of the patent and amortization expense

for 2007.

2. Prepare the journal entry to record the expenditure for successful litigation and

amortization expense for 2010. c. Prepare the journal entry to record the impairment of

the patent (if any) and amortization expense for 2011.