d Corporation purchased a depreciable asset for $840300 on January 1, 2018. The estimated salvage value is $87000, and the estimated total useful life is 9 years. The straight-line method is used for depreciation. In 2021, Concord changed its estimates to a total useful life of 5 years with a salvage value of $146000. What is 2021 depreciation expense

$221,600

Explanation:

The computation of the depreciation expense for the year 2021 is as follows:

Depreciation expense is

= (Cost - Salvage value) ÷ Useful life

= ($840,300 - $87,000) ÷ 9

= $83,700 per year

Now the book value would be

= $840,300 - ($83,700 × 3 years)

= $589,200

And, finally the revised depreciation is

= ($589,200 - $146,000) ÷ 2

= $221,600

We simply applied the above formula so that the correct value could come

And, the same is to be considered

Consolidated Cost of Goods Sold is $4,970,000.

Explanation:

A 90% owned subsidiary presents a controlling interest and consolidated financial statements must be prepared by the Parent company.

In preparing consolidated financial statements, any transactions between the parent and subsidiary (Intragroup transactions) must be eliminated.

At Beginning of the year

Recognize the unrealized gains on intercompany sales as follows ;

Debit : Retained Earnings  $60,000

Credit : Cost of Sales  $60,000

During the year 2020

Eliminate unrealized gains on intercompany sales as follows

Debit : Cost of Sales $30,000

Credit : Inventory $30,000

Consolidated Cost of Goods Sold

To determine the Cost of Goods Sold add 100 % of Parent and 100% of Subsidiary and also remember to effect the journals above as follows :

Cost of Goods Sold = $4,000,000 + $1,000,000 - $60,000 + $30,000

                                 = $4,970,000

Conclusion

Therefore, Consolidated Cost of Goods Sold is $4,970,000.