Mario Company completed the following transactions and events involving its production equipmentYear 1 Jan. 1Paid $35,780 for a new production equipment estimated to have a seven-year life and a $3,500 salvage value. Dec. 31Record annual straight-line depreciation on the equipmentYear 2 Dec. 31The equipment’s estimated useful life was changed from seven to five years, and the estimated salvage value was decreased to $3,000. Record revised annual straight-line depreciation on the equipmentYear 3 Dec.31Record annual straight-line depreciation on the equipmentDec. 31Sold the equipment for $18,000 cash. Prepare journal entries to record these transactions and events.

Name: Mario Company completed the following transactions and events involvin
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Description: Mario Company completed the following transactions and events involving its production equipmentYear 1 Jan. 1Paid $35,780 for a new production equipment estimated to have a seven-year life and a $3,500 salvage value. Dec. 31Record annual straigh

Depreciation means the amount fixed assets written off due to normal wear and tear , normal usage , change in technology etc. Depreciation is charged in books of accounts only when assets is ready to use. JOURNAL ENTRIES IN THE BOOKS OF MARIO COMPANY Date Particulars Amount Dr. Amount Cr. Year 1 Jan. 1 Equipment A/c _____________Dr. 35,780 - To Cash A/c - 35,780 (Being equipment purchased in cash) Year 1 Dec. 31 Depreciation expenses A/c ____________Dr. (35780-3500)/7 4,611 - To Equipment A/c - 4,611 (Being depreciation charged) Year 2 Dec. 31 Depreciation expenses A/c ____________Dr. (35780-4611-3000)/4 7,042 - To Equipment A/c - 7,042 (Being depreciation charged) Year 3 Dec. 31 Depreciation expenses A/c ____________Dr. (35780-4611-3000)/4 7,042 - To Equipment A/c - 7,042 (Being depreciation charged) Year 3 Dec. Cash A/c _______________Dr. 18,000 - To Equipment A/c - 17,085 To Profit on sale of equipment A/c - 915 (Being equipment sold for cash)

Answered: Mario Company completed the following…

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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Mario Company completed the following transactions and events involving its production equipment
Year 1
Jan. 1	Paid $35,780 for a new production equipment estimated to have a seven-year life and a $3,500 salvage value.
Dec. 31	Record annual straight-line depreciation on the equipment
Year 2
Dec. 31	The equipment’s estimated useful life was changed from seven to five years, and the estimated salvage value
	was decreased to $3,000.
	Record revised annual straight-line depreciation on the equipment
Year 3
Dec.31	Record annual straight-line depreciation on the equipment
Dec. 31	Sold the equipment for $18,000 cash.

Prepare journal entries to record these transactions and events.

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