FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Year 1
| Jan. | 1 | Paid $287,600 cash plus $11,500 in sales tax and $1,500 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $20,600 salvage value. Loader costs are recorded in the Equipment account. | ||
| Jan. | 3 | Paid $4,800 to install air-conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,400. | ||
| Dec. | 31 | Recorded annual straight-line |
Year 2
| Jan. | 1 | Paid $5,400 to overhaul the loader’s engine, which increased the loader’s estimated useful life by two years. | ||
| Feb. | 17 | Paid $820 for minor repairs to the loader after the operator backed it into a tree. | ||
| Dec. | 31 | Recorded annual straight-line depreciation on the loader. |
Required:
Prepare
*Debt Equipment
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