3. On July 1, 2023 Jackson Company purchased factory equipment for $880,000 with an estimated $40,000 salvage value. The estimated useful life for the equipment is 12 years. During 2023, 2024, and 2025 the equipment is depreciated using the straight-line method. During 2026, $36,000 in maintenance is required on the machine to keep it running up to its standard operating specifications. Also, in 2026, $115,000 is spent to improve the equipment's efficiency and prolong its useful life. The new useful life is expected to be an additional 12 years beginning in 2026 and the revised salvage value is $25,000. 1000,2ES Instructions 1. What journal entry is required to record partial year depreciation for 2023? 2. What journal entry is required to record annual depreciation for 2025? 3. Explain the accounting treatment of the $36,000 in maintenance that occurred in 2026. (S) 4. Explain the accounting treatment of the $115,000 in equipment improvement that occurred in 2026. 5. What journal entry is required to record annual depreciation for 2026?

3. On July 1, 2023 Jackson Company purchased factory equipment for $880,000 with an estimated $40,000 salvage value. The estimated useful life for the equipment is 12 years. During 2023, 2024, and 2025 the equipment is depreciated using the straight-line method. During 2026, $36,000 in maintenance is required on the machine to keep it running up to its standard operating specifications. Also, in 2026, $115,000 is spent to improve the equipment's efficiency and prolong its useful life. The new useful life is expected to be an additional 12 years beginning in 2026 and the revised salvage value is $25,000. 1000,2ES Instructions 1. What journal entry is required to record partial year depreciation for 2023? 2. What journal entry is required to record annual depreciation for 2025? 3. Explain the accounting treatment of the $36,000 in maintenance that occurred in 2026. (S) 4. Explain the accounting treatment of the $115,000 in equipment improvement that occurred in 2026. 5. What journal entry is required to record annual depreciation for 2026?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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