Bonita Company shows the following entries in its Equipment account for 2021. All amounts are based on historical cost. Equipment 2021 2021 Jan. 1 Balance 148,190 June 30 Cost of equipment sold Aug. 10 Purchases 30,770 (purchased prior to 2021) 25,100 12 Freight on equipment purchased 685 25 Installation costs 2,920 Nov. 10 Repairs 530

Part A: Prepare correcting entry if necessary.

Part B: Assuming that depreciation is to be charged for a full year on the ending balance in the asset account, compute the proper depreciation charge for 2018 under each of the methods listed below. Assume an estimated life of 10 years, with no salvage value. The machinery included in the January 1, 2018, balance was purchased in 2019

The answer is (a)  $6,250 (b) $24,154

Explanation:

Solution

Journal Entries for Bonita Company

Account Titles and Explanation                   Debit               Credit

Repairs                                                            $530

Equipment                                                                               $530

Note: The repairs should not be added  to the cost of equipment

The balance in equipment ending = $148,190 + $30,770 + $685 + $2,920 - $25,100 = $157,465

(a) The Depreciation under method of  straight line is  = $157,465 / 10 = $15,747

The balance of asset purchased in 2019 = $148,190 - $25,100 = $123,090

Thus,

The depreciation is = $123,090 * 8/55 = $17,904

Then

Depreciation for purchased equipment  in 2021 = ($30,770 + $685 + $2,920) X 10/55 = $6,250

(2) Therefore, depreciation in total is  = $17,904 + $6,250 = $24,154

answer; /// radio frequency identification;

answer; trojan horse;