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Exercise 10-14 Ordinary repairs, extraordinary repairs, and betterments LO C3

Exercise 10-14 Ordinary repairs, extraordinary repairs, and betterments LO C3

FINANCIAL ACCOUNTING
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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**Exercise 10-14: Ordinary Repairs, Extraordinary Repairs, and Betterments (LO C3)** **Scenario:** Oki Company pays $253,600 for equipment expected to last four years and has a $30,000 salvage value. Prepare journal entries to record the following costs related to the equipment. 1. Paid $23,400 cash for a new component that increased the equipment's productivity. 2. Paid $5,850 cash for minor repairs necessary to keep the equipment working well. 3. Paid $16,350 cash for significant repairs to increase the useful life of the equipment from four to seven years. **Journal Entry Worksheet:** The worksheet includes fields for transaction data with columns for: - Description (Transaction) - General Journal - Debit - Credit Instructions: Record the cost of minor repairs of $5,850 paid in cash to keep the equipment working well. **Note:** Enter debits before credits. Actions Available: - Record entry - Clear entry - View general journal Navigation: Previous (1 of 4) | Next (3 of 4) **Explanation:** This exercise provides an example of how financial entries are recorded for equipment-related expenses to maintain, enhance, or extend its productivity and lifespan. The costs are categorized into betterments (enhancements) and repairs (both ordinary and extraordinary) and need to be appropriately journaled.
Transcribed Image Text:**Exercise 10-14: Ordinary Repairs, Extraordinary Repairs, and Betterments (LO C3)** **Scenario:** Oki Company pays $253,600 for equipment expected to last four years and has a $30,000 salvage value. Prepare journal entries to record the following costs related to the equipment. 1. Paid $23,400 cash for a new component that increased the equipment's productivity. 2. Paid $5,850 cash for minor repairs necessary to keep the equipment working well. 3. Paid $16,350 cash for significant repairs to increase the useful life of the equipment from four to seven years. **Journal Entry Worksheet:** The worksheet includes fields for transaction data with columns for: - Description (Transaction) - General Journal - Debit - Credit Instructions: Record the cost of minor repairs of $5,850 paid in cash to keep the equipment working well. **Note:** Enter debits before credits. Actions Available: - Record entry - Clear entry - View general journal Navigation: Previous (1 of 4) | Next (3 of 4) **Explanation:** This exercise provides an example of how financial entries are recorded for equipment-related expenses to maintain, enhance, or extend its productivity and lifespan. The costs are categorized into betterments (enhancements) and repairs (both ordinary and extraordinary) and need to be appropriately journaled.
Certainly! Here's a transcription suitable for an educational website: --- ### Exercise 10-14 Ordinary Repairs, Extraordinary Repairs, and Betterments LO C3 **Scenario:** Oki Company pays $253,600 for equipment expected to last four years and have a $30,000 salvage value. Prepare journal entries to record the following costs related to the equipment. 1. Paid $23,400 cash for a new component that increased the equipment's productivity. 2. Paid $5,850 cash for minor repairs necessary to keep the equipment working well. 3. Paid $16,350 cash for significant repairs to increase the useful life of the equipment from four to seven years. **Instructions:** - Use the journal entry worksheet provided below to record each transaction. **Journal Entry Worksheet:** - **Transaction:** Fill in the details as appropriate for each transaction number. - **General Journal:** Input the transaction details where applicable. - **Debit/Credit:** Enter the corresponding amounts in the Debit or Credit columns. (Note: Enter debits before credits.) **Worksheet Interface:** - "Record entry" button to save your input. - "Clear entry" button to reset the current entry. - "View general journal" allows you to review the saved entries. --- Feel free to use this formatting and content for your educational purposes.
Transcribed Image Text:Certainly! Here's a transcription suitable for an educational website: --- ### Exercise 10-14 Ordinary Repairs, Extraordinary Repairs, and Betterments LO C3 **Scenario:** Oki Company pays $253,600 for equipment expected to last four years and have a $30,000 salvage value. Prepare journal entries to record the following costs related to the equipment. 1. Paid $23,400 cash for a new component that increased the equipment's productivity. 2. Paid $5,850 cash for minor repairs necessary to keep the equipment working well. 3. Paid $16,350 cash for significant repairs to increase the useful life of the equipment from four to seven years. **Instructions:** - Use the journal entry worksheet provided below to record each transaction. **Journal Entry Worksheet:** - **Transaction:** Fill in the details as appropriate for each transaction number. - **General Journal:** Input the transaction details where applicable. - **Debit/Credit:** Enter the corresponding amounts in the Debit or Credit columns. (Note: Enter debits before credits.) **Worksheet Interface:** - "Record entry" button to save your input. - "Clear entry" button to reset the current entry. - "View general journal" allows you to review the saved entries. --- Feel free to use this formatting and content for your educational purposes.
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