Mercury Delivery Service completed the following transactions involving equipment. Year 1 Jan. 1 Paid $25,860 cash plus $1,810 in sales tax for a new delivery van that was estimated to have a five-year life and a $3,670 salvage value. Van costs are recorded in the Equipment account. 3 Paid $1,850 to install sorting racks in the van for more accurate and quicker delivery of packages. This increases the estimated salvage value of the van by another $230. Dec. 31 Recorded annual straight-line depreciation on the van. Year 2 Jan. 1 Paid $2,064 to overhaul the van’s engine, which increased the van’s useful life by two years. May 10 Paid $800 for minor repairs to the van after the driver backed it into a loading dock. Dec. 31 Recorded annual straight-line depreciation on the van. Required Prepare journal entries to record these transactions and events.

Mercury Delivery Service completed the following transactions involving equipment. Year 1 Jan. 1 Paid $25,860 cash plus $1,810 in sales tax for a new delivery van that was estimated to have a five-year life and a $3,670 salvage value. Van costs are recorded in the Equipment account. 3 Paid $1,850 to install sorting racks in the van for more accurate and quicker delivery of packages. This increases the estimated salvage value of the van by another $230. Dec. 31 Recorded annual straight-line depreciation on the van. Year 2 Jan. 1 Paid $2,064 to overhaul the van’s engine, which increased the van’s useful life by two years. May 10 Paid $800 for minor repairs to the van after the driver backed it into a loading dock. Dec. 31 Recorded annual straight-line depreciation on the van. Required Prepare journal entries to record these transactions and events.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11PA: Montezuma Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and...

See similar textbooks

Similar questions

Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.
Montezuma Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montezuma uses the straight-line depreciation method. Calculate the annual depreciation expense. After three years of recording depreciation, Montezuma determines that the delivery truck will only be useful for another three years and that the salvage value will increase to $4,000. Determine the depreciation expense for the final three years of the assets life, and create the journal entry for year four.
During the current year, Arkells Inc. made the following expenditures relating to plant machinery. Renovated seven machines for $250,000 to improve efficiency in production of their remaining useful life of eight years Low-cost repairs throughout the year totaled $79,000 Replaced a broken gear on a machine for $6,000 A. What amount should be expensed during the period? B. What amount should be capitalized during the period?
Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.
Xpress Delivery Service completed the following transactions and events involving the purchase and operation of equipment for its business. 20X0 Jan. 1 Paid $24,950 cash plus $1,950 in sales tax for a new delivery van that was estimated to have a five-year life and a $3,400 salvage value. Van costs are recorded in the Equipment account. Jan. 3 Paid $1,550 to install sorting racks in the van for more accurate and quicker delivery of packages. This increases the estimated salvage value of the van by another $200. Dec. 31 Recorded annual straight-line depreciation on the van. 20X1 Jan. 1 Paid $1,970 to overhaul the van’s engine, which increased the van’s estimated useful life by two years. May 10 Paid $600 to repair the van after the driver backed it into a loading dock. Dec. 31 Record annual straight-line depreciation on the van. (Round to the nearest dollar.) Required Prepare journal entries to record these transactions and events.
Champion Contractors completed the following transactions involving equipment. Year 1 January 1 Paid $298,000 cash plus $11,920 in sales tax and $1,700 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $29,800 salvage value. Loader costs are recorded in the Equipment account. January 3 Paid $4,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,200. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $4,700 to overhaul the loader’s engine, which increased the loader’s estimated useful life by two years. February 17 Paid $1,175 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded annual straight-line depreciation on the loader. Required: Prepare journal entries to record these transactions and events.
Champion Contractors completed the following transactions involving equipment. Year 1 Jan. 1 Paid $287,600 cash plus $11,500 in sales tax and $1,500 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $20,600 salvage value. Loader costs are recorded in the Equipment account. 3 Paid $4,800 to install air-conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,400. Dec. 31 Recorded annual straight-line depreciation on the loader. Year 2 Jan. 1 Paid $5,400 to overhaul the loader’s engine, which increased the loader’s estimated useful life by two years. Feb. 17 Paid $820 for minor repairs to the loader after the operator backed it into a tree. Dec. 31 Recorded annual straight-line depreciation on the loader. Required Prepare journal entries to record these transactions and events.
Champion Contractors completed the following transactions involving equipment. Year 1 January 1 Paid $298,000 cash plus $11,920 in sales tax and $1,900 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $29,800 salvage value. Loader costs are recorded in the Equipment account. January 3 Paid $5,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,500. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $4,300 to overhaul the loader’s engine, which increased the loader’s estimated useful life by two years. February 17 Paid $1,075 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded annual straight-line depreciation on the loader. Required:Prepare journal entries to record these transactions and events.
Champion Contractors completed the following transactions involving equipment. Year 1 January 1 Paid $287,600 cash plus $11,500 in sales tax and $1,500 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $20,600 salvage value. Loader costs are recorded in the Equipment account. January 3 Paid $4,800 to install air-conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,400. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $5,400 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 Paid $820 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded annual straight-line depreciation on the loader. Required: Prepare journal entries to record these transactions and events. RE
Champion Contractors completed the following transactions Involving equipment. Year 1 January 1 Paid $287,600 cash plus $11,500 in sales tax and $1,500 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $20,600 salvage value. Loader costs are recorded in the Equipment account. January 3 Paid $4,800 to install air-conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,400. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $5,400 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 Paid $820 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded annual straight-line depreciation on the loader. Required: Prepare journal entries to record these transactions and events. View transaction list Journal entry…
Champion Contractors completed the following transactions involving equipment. Year 1 January 1 Paid $ 270,000 cash plus $10, 800 in sales tax and $2,000 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $27,000 salvage value. Loader costs are recorded in the Equipment account. January 3 Paid $7,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $2,100. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $4,500 to overhaul the loaders engine, which increased the loaders estimated useful life by two years. February 17 Paid S1, 125 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded annual straight - line depreciation on the loader. Required: Prepare journal entries to record these transactions and events.v
Year 1 account. January 1 Paid $262,000 cash plus $10,480 in sales tax and $1,500 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $26,200 salvage value. Loader costs are recorded in the Equipment January 3 Paid $7,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $2,100. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $4,300 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 Paid $1,075 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded annual straight-line depreciation on the loader. Required: Prepare journal entries to record these transactions and events. View transaction list Journal entry worksheet > 1 2 3 4 5 6 Recorded annual straight-line depreciation on the…