Pete's Propellers Company showed the following information in its Property, Plant, and Equipment Subledger regarding Machine #5027. Machine #5027 Component Single metal housing Motor Blade Date of Depreciation purchase Method AT Jan. 12/21 SL Jan. 12/21 DDB Jan. 12/21 SL View transaction list Cost $ 70,000 27,000 8,320 $105,320 Est. Residual Est. Life $10,000 6,000 1,600 *SL = Straight-line; DDB = Double-declining-balance On January 7, 2023, the machine blade cracked and it was replaced with a new one costing $14,000 purchased for cash (the old blade was scrapped). The new blade had an estimated residual value of $2,000 and an estimated life of five years and would continue to be depreciated using the straight-line method. During 2023, it was determined that the useful life on the metal housing should be increased to a total of 18 years instead of 15 years and that the residual value should be increased to $10,400. Required: 1. Prepare the entry to record the purchase of the replacement blade. Journal entry worksheet 15 yrs 10 yrs 5 yrs

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
100%
Pete's Propellers Company showed the following information in its Property, Plant, and Equipment Subledger regarding Machine
#5027.
Machine #5027
Component
Single metal housing
Motor
Blade
View transaction list
<
*SL = Straight-line; DDB = Double-declining-balance
On January 7, 2023, the machine blade cracked and it was replaced with a new one costing $14,000 purchased for cash (the old blade
was scrapped). The new blade had an estimated residual value of $2,000 and an estimated life of five years and would continue to be
depreciated using the straight-line method. During 2023, it was determined that the useful life on the metal housing should be
increased to a total of 18 years instead of 15 years and that the residual value should be increased to $10,400.
Required:
1. Prepare the entry to record the purchase of the replacement blade.
Journal entry worksheet
1
Date of Depreciation
purchase
Method*
SL
DDB
SL
Jan. 12/21
Jan. 12/21
Jan. 12/21
2
Record replacement/sale of old blade.
Record entry
Note: Enter debits before credits.
Cost
$ 70,000
27,000
8,320
$105,320
Date
General Journal
Jan 07, 2023 Accumulated depreciation, machine #5027 - blade
Loss on disposal
Machine #5027 - blade (old)
Total Depreciation expense
Est.
Residual
$10,000
6,000
1,600
Clear entry
Est. Life
15 yrs
10 yrs
5 yrs
Debit
Credit
8,320
View general journal
2. Calculate the total depreciation expense to be recorded on Machine #5027 for 2023.
Transcribed Image Text:Pete's Propellers Company showed the following information in its Property, Plant, and Equipment Subledger regarding Machine #5027. Machine #5027 Component Single metal housing Motor Blade View transaction list < *SL = Straight-line; DDB = Double-declining-balance On January 7, 2023, the machine blade cracked and it was replaced with a new one costing $14,000 purchased for cash (the old blade was scrapped). The new blade had an estimated residual value of $2,000 and an estimated life of five years and would continue to be depreciated using the straight-line method. During 2023, it was determined that the useful life on the metal housing should be increased to a total of 18 years instead of 15 years and that the residual value should be increased to $10,400. Required: 1. Prepare the entry to record the purchase of the replacement blade. Journal entry worksheet 1 Date of Depreciation purchase Method* SL DDB SL Jan. 12/21 Jan. 12/21 Jan. 12/21 2 Record replacement/sale of old blade. Record entry Note: Enter debits before credits. Cost $ 70,000 27,000 8,320 $105,320 Date General Journal Jan 07, 2023 Accumulated depreciation, machine #5027 - blade Loss on disposal Machine #5027 - blade (old) Total Depreciation expense Est. Residual $10,000 6,000 1,600 Clear entry Est. Life 15 yrs 10 yrs 5 yrs Debit Credit 8,320 View general journal 2. Calculate the total depreciation expense to be recorded on Machine #5027 for 2023.
Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Accounting for Property, Plant and Equipment
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education