On June 27, 2020, $66,000 cash was paid for a new motor to replace the old one, which was scrapped. The new motor had an estimated useful life of 12 years and a residual value of $3,000. Early in 2020, it was determined that the useful life of the boat's fibreglass body should be adjusted to a total of 20 years with no change in the residual value.Depreciation taken on the fishing boat (body plus motor) on December 31, 2020, the company’s year-end.

On June 27, 2020, $66,000 cash was paid for a new motor to replace the old one, which was scrapped. The new motor had an estimated useful life of 12 years and a residual value of $3,000. Early in 2020, it was determined that the useful life of the boat's fibreglass body should be adjusted to a total of 20 years with no change in the residual value.Depreciation taken on the fishing boat (body plus motor) on December 31, 2020, the company’s year-end.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles

Section: Chapter Questions

Problem 8.8MCP

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