At the beginning of the 2025 fiscal year, an inexperienced maintenance technician at Sheffield Company did not check the oil in one ofthe company cars and the engine burned up. Sheffield replaced the engine at a cost of $8200. The material expenditure is expected toextend the useful life of the car by 3 years. The car had an original cost of $38000 and a 4-year life. The balance in AccumulatedDepreciation at the time of the expenditure was $6700. The entry to record the purchase would include aO debit to Equipment-Trucks of $1500.• debit to Accumulated Depreciation of $8200.O debit to Accumulated Depreciation of $6700,O debit to Repairs and Maintenance expense of $8200,h

The objective of the question is to determine the correct accounting entry to record the replacement…

Answered: At the beginning of the 2025 fiscal…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On January 1, 2019, Woodstock, Inc. purchased a machine costing $42.400. Woodstock also paid $2,200 for transportation and installation. The expected useful life of the machine is 6 years and the residual value is $6.200. If Woodstock uses the straight-line depreciation method, which of the following statements is incorrect? Multiple Cholce The December 31, 2020 book value Is$25.600. The annual depreclation expense Is $6.400. The December 31, 2019 book value Is $38.200. The December 31, 2021 accumulated depreclation balance is $19.200,
On May 1, 2017 Merron Inc. sold a machine that it no longer had any use for. Merron sold the machine for $2,000 cash. The original cost of the machine was $32,000 and at December 31, 2016 the accumulated depreciation on the machine was $26,000. The machine had an original useful life of 10 years with zero estimated residual value. Merron uses the straight-line method to depreciate all of their machines. Required: Prepare the journal entries required for this transaction.
On January 1, 2020, Cullumber Corp. acquired a machine at a cost of $1020000. It is to be depreciated on the straight-line method over a 5-year period with no residual value. Because of a bookkeeping error, no depreciation was recognized in Cullumber's 2020 financial statements. The oversight was discovered during the preparation of Cullumber's 2021 financial statements. Depreciation expense on this machine for 2021 should be $255000. $204000. $408000. $0.
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. Instructions . 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? hevni pris
On January 2, 2017, Cancer Company purchased transportation equipment 1 costing P2,400,000. The new asset has an estimated useful life of 8 years with no salvage value. Cancer Company depreciates this type of asset using the straight-line method. On January 2, 2019, Cancer determined that the machine has a useful life of 6 years from the date of acquisition with no salvage value. As a result of the change in the estimated useful life of the asset, what is the carrying amount of the transportation equipment as of December 31, 2019?
A company purchased a new machine on January 1, 2014. The supplier, "Forever supply" was paid $2,000 in cash. In addition, transportation and installation were $180 (paid in cash), legal costs associated with the asset were $20 (paid in cash). The machine has an estimated life of 5 years and an estimated salvage value of $300. It is company policy to use straight line depreciation for all of its machines. question: Assume the machine was sold on July 1, 2015 to "company A" for $1200 cash. Prepare the journal entry/entries to record this transaction. What was the gain/loss? Include the classification of the accounts and clearly label your debits and credits.
Marsh Corporation purchased a machine on July 1, 2012, for $1,250,000. The machine was estimated to have a useful life of 10 years with an estimated salvage value of $70,000. During 2015, it became apparent that the machine would become uneconomical after December 31, 2019, and that the machine's salvage value is now $0. Accumulated depreciation on this machine as of December 31, 2014, was $295,000. What should be the charge for depreciation in 2015 under generally accepted accounting principles? O $177,000 O $191,000 O $205,000 O $238,750
On January 1, 2007, Flax Co. purchased a machine for 528,000 and depreciated it by the straight-line method using an estimateduseful life of eight years with no salvage value. On January 1, 2010, Flax determined that the machine had a useful life of six years from the date of acquisition and will have a salvage value of 48,000. An accounting change was made in 2010 to reflect these additional data. The accumulated depreciation for this machine should have a balance at December 31, 2010 ofa.292,000b.308,000c.320,000d.352,000
The Giovanni Company purchased a tooling machine in 2007 for $120,000. The machine was being depreciated by the straight-line method over an estimated useful life of 20 years, with no salvage value. At the beginning of 2017, after 10 years of use, Giovanni paid $20,000 to overhaul the machine. Because of this improvement, the machine's estimated useful life would be extended an additional 5 years. What would be the depreciation expense recorded for the above machine in 2017? a.$7,333 b.$4,000 c.$6,000 d.$5,333
Culver Automotive purchased equipment on October 1, 2024, at a total cost of $182,000. The machine has an estimated useful life of eight years or 100,000 hours, and an estimated residual value of $42,000. During 2024 and 2025, the machinery was used 6,300 and 14,700 hours, respectively. Calculate depreciation expense at December 31, 2024 and December 31, 2025, under the following depreciation methods: (Round answers to 0 decimal places, e.g. 5,275. and Round Depreciation cost per unit to 1 decimal places, e.g. 527.5) Straight-line depreciation Units-of-production depreciation Double diminishing-balance depreciation $ LA $ LA 2024 $ LA $ LA 2025
On January 1, 2021, Montana Enterprises purchased a $100,000 semi-trailer truck. In 2021 and 2022, Montana depreciated the truck using the straight-line method with an estimated 10 year useful life and an estimated $10,000 salvage value. At the beginning of 2023, Montana decided to adjust the initial estimates. The company now believes the truck will last a total of 15 years and have a salvage value of $17,000. At December 31, 2023, what will be the truck's adjusted book value reflecting the change in estimate? Multiple Choice O $73,000 $83,400 $85,000 $77,000
Lugar Company purchased a piece of machinery for $28,500 on January 1, 2016, and has been depreciating the machine using the sum-of-the-years'-digits method based on a five-year estimated useful life and no salvage value. On January 1, 2018, Lugar decided to switch to the straight-line method of depreciation. The salvage value is still zero and the estimated useful life is changed to a total of six years from the date of purchase. Ignore income taxes. Required:1. Prepare the appropriate journal entry, if any, to record the accounting change under GAAP.2. Prepare the journal entry to record depreciation for 2018.

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS