On January 2, 2017, Greenwood Company purchased and placed in operation a machine estimated to have a 10-year life and no salvage value. The machine cost P600,000 and was depreciated on a straight-line basis. On December 27, 2020, a P60,000 device that increased the machine's output by one fourth was added to the machine. The new device made no change in the machine's estimated life and salvage value. During the first week of January, 2024 the machine was completely overhauled at a cost of P180,000. The overhaul added three additional years to the machine's estimated life but did not change its salvage value. Prepare entries in general form to record: a) the purchase of the machine b) the 2017 depreciation c) the addition of the new device d) the 2021 depreciation e) overhauling of the machine f) the 2024 depreciation

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On January 2, 2017, Greenwood Company purchased and placed in operation a machine estimated to have a 10-year
life and no salvage value. The machine cost P600,000 and was depreciated on a straight-line basis. On December 27,
2020, a P60,000 device that increased the machine's output by one fourth was added to the machine. The new device
made no change in the machine's estimated life and salvage value. During the first week of January, 2024 the machine
was completely overhauled at a cost of P180,000. The overhaul added three additional years to the machine's estimated
life but did not change its salvage value.

Prepare entries in general form to record:
a) the purchase of the machine
b) the 2017 depreciation
c) the addition of the new device
d) the 2021 depreciation
e) overhauling of the machine
f) the 2024 depreciation

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