Business, 25.02.2020 01:03 brooke0713
Paid $290,000 cash plus $11,600 in sales tax and $1,700 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $29,000 salvage value. Loader costs are recorded in the Equipment account.
2016
Jan. 1 Paid $290,000 cash plus $11,600 in sales tax and $1,900 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $29,000 salvage value. Loader costs are recorded in the Equipment account.
Jan. 3 Paid $5,000 to enclose the cab and install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,500.
Dec. 31 Recorded annual straight-line depreciation on the loader.
2017
Jan. 1 Paid $4,100 to overhaul the loader’s engine, which increased the loader’s estimated useful life by two years.
Feb. 17 Paid $1,025 to repair the loader after the operator backed it into a tree.
Dec. 31 Recorded annual straight-line depreciation on the loader.
Required:
Prepare journal entries to record these transactions and events.
1. Paid $290,000 cash plus $11,600 in sales tax and $1,900 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $29,000 salvage value. Loader costs are recorded in the Equipment account.
2. Paid $5,000 to enclose the cab and install air-conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,500
3. Recorded annual straight-line depreciation on the loader
4. Paid $4,100 to overhaul the loader’s engine, which increased the loader’s estimated useful life by two years.
5. Paid $1,025 to repair the loader after the operator backed it into a tree.
6. Recorded annual straight-line depreciation on the loader
Answers: 3
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Paid $290,000 cash plus $11,600 in sales tax and $1,700 in transportation (FOB shipping point) for a...
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