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Calculate the total depreciation expense to be recorded on Machine #5027 for 2023.

Calculate the total depreciation expense to be recorded on Machine #5027 for 2023.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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2. Calculate the total depreciation expense to be recorded on Machine # 5027 for 2023. Total Depreciation expense
Transcribed Image Text:2. Calculate the total depreciation expense to be recorded on Machine # 5027 for 2023. Total Depreciation expense
Pete's Propellers Company showed the following information in its Property, Plant, and Equipment Subledger regarding Machine # 5027. Machine # 5027 Component Single metal housing Motor Blade View transaction list Date of No 1 purchase Date Jan 07, 2023 Jan. 12/22 Method* Cost Residual Est. Life SL Might $ 80,000 $8,000 15 yrs 41,000 6,000 10 yrs DDB SL 16,800 $137,800 Jan. 12/22 Depreciation Jan. 12/22 Required: 1. Prepare the entry to record the purchase of the replacement blade. *SL = Straight-line; DDB = Double-declining-balance On January 7, 2023, the machine blade cracked and it was replaced with a new one costing $13,400 purchased for cash (the old blade was scrapped). The new blade had an estimated residual value of $2,000 and an estimated life of five years and would continue to be depreciated using the straight-line method. During 2023, it was determined that the useful life on the metal housing should be increased to a total of 20 years instead of 15 years and that the residual value should be increased to $10,100. View journal entry worksheet Est. 1,400 General Journal 5 yrs Machine # 5027 - blade (new) Accumulated depreciation, machine #5027 - blade Debit Credit ********** Ⓒ
Transcribed Image Text:Pete's Propellers Company showed the following information in its Property, Plant, and Equipment Subledger regarding Machine # 5027. Machine # 5027 Component Single metal housing Motor Blade View transaction list Date of No 1 purchase Date Jan 07, 2023 Jan. 12/22 Method* Cost Residual Est. Life SL Might $ 80,000 $8,000 15 yrs 41,000 6,000 10 yrs DDB SL 16,800 $137,800 Jan. 12/22 Depreciation Jan. 12/22 Required: 1. Prepare the entry to record the purchase of the replacement blade. *SL = Straight-line; DDB = Double-declining-balance On January 7, 2023, the machine blade cracked and it was replaced with a new one costing $13,400 purchased for cash (the old blade was scrapped). The new blade had an estimated residual value of $2,000 and an estimated life of five years and would continue to be depreciated using the straight-line method. During 2023, it was determined that the useful life on the metal housing should be increased to a total of 20 years instead of 15 years and that the residual value should be increased to $10,100. View journal entry worksheet Est. 1,400 General Journal 5 yrs Machine # 5027 - blade (new) Accumulated depreciation, machine #5027 - blade Debit Credit ********** Ⓒ
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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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