Year 1 January 1 Paid $310,000 cash plus $12,720 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 $31,800 salvage value. Loader costs are recorded in the Equipment account. January 3 Paid $4,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,200. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $4,000 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 Paid $1,000 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded annual straight-line depreciation on the loader. Required: Prepare journal entries to record these transactions and events. View transaction list Journal entry worksheet 6 Recorded annual straight-line depreciation on the loader. Note: Enter debits before credits. Date General Journal December 31, Year 2 Depreciation expense Equipment Accumulated depreciation Equipment Debit Credit Check m

Year 1 January 1 Paid $310,000 cash plus $12,720 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 $31,800 salvage value. Loader costs are recorded in the Equipment account. January 3 Paid $4,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,200. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $4,000 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 Paid $1,000 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded annual straight-line depreciation on the loader. Required: Prepare journal entries to record these transactions and events. View transaction list Journal entry worksheet 6 Recorded annual straight-line depreciation on the loader. Note: Enter debits before credits. Date General Journal December 31, Year 2 Depreciation expense Equipment Accumulated depreciation Equipment Debit Credit Check m

Name: Year 1January 1Paid $318,000 cash plus $12,720 in sales tax and $1,70
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Description: Year 1January 1Paid $318,000 cash plus $12,720 in sales tax and $1,700 in transportation (FOB shipping point) for a newloader. The loader is estimated to have a four-year life and a $31,800 salvage value. Loader costs arerecorded in the Equipment ac

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 13PB: Montezuma Inc. purchases a delivery truck for $20,000. The truck has a salvage value of $8,000 and...

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Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.
Use the information in Problem A-1 to solve this problem. Assume that the van is five-year property for tax purposes. Required Prepare a schedule of depreciation under MACRS. Round figures to the nearest whole dollar. PROBLEM A-1 A delivery van was bought for 18,000. The estimated life of the van is four years. The trade-in value at the end of four years is estimated to be 2,000. Check Figure Year 3 depreciation, 3,456
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Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.
Montezuma Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montezuma uses the straight-line depreciation method. Calculate the annual depreciation expense. After three years of recording depreciation, Montezuma determines that the delivery truck will only be useful for another three years and that the salvage value will increase to $4,000. Determine the depreciation expense for the final three years of the assets life, and create the journal entry for year four.
Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for ten years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.
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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 depreciation on the loader. 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 journal entries to record these transactions and events. *Debt Equipment
Year 1 account. January 1 Paid $262,000 cash plus $10,480 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 $26,200 salvage value. Loader costs are recorded in the Equipment January 3 Paid $7,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $2,100. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $4,300 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 Paid $1,075 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded annual straight-line depreciation on the loader. Required: Prepare journal entries to record these transactions and events. View transaction list Journal entry worksheet > 1 2 3 4 5 6 Recorded annual straight-line depreciation on the…
Year 1 January 1 Paid $294,000 cash plus $11,760 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 $29,400 salvage value. Loader costs are recorded in the Equipment account. January 3 Paid $6,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,800. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $4,800 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 Paid $1,200 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded annual straight-line depreciation on the loader. Required: Prepare journal entries to record these transactions and events. View transaction list Journal entry worksheet 1 2 3 4 5 6 Paid $294,000 cash plus $11,760 in sales tax and $1,700…