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 Date of purchase Jan. 12/18 Jan. 12/18 Jan. 12/18 Journal entry worksheet < *SL = Straight-line; DDB = Double-declining-balance On January 7, 2020, the machine blade cracked and it was replaced with a new one costing $11,800 purchased for cash (the old blade was scrapped). The new blade had an estimated residual value of $1,500 and an estimated life of five years and would continue to be depreciated using the straight-line method. During 2020, it was determined that the useful life on the metal housing should be increased to a total of 20 years instead of 15 years and that the residual value should be increased to $9,300. Required: 1. Prepare the entry to record the purchase of the replacement blade. 2 Depreciation Method* SL DDB SL Date Jan 07, 2020 Record replacement/sale of old blade. Note: Enter debits before credits. Cost $50,000 33,000 12,000 $ 95,000 Est. Residual Est. Life $8,000 15 yrs. 4,000 1,200 General Journal 10 yrs 5 yrs Debit Credit
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 Date of purchase Jan. 12/18 Jan. 12/18 Jan. 12/18 Journal entry worksheet < *SL = Straight-line; DDB = Double-declining-balance On January 7, 2020, the machine blade cracked and it was replaced with a new one costing $11,800 purchased for cash (the old blade was scrapped). The new blade had an estimated residual value of $1,500 and an estimated life of five years and would continue to be depreciated using the straight-line method. During 2020, it was determined that the useful life on the metal housing should be increased to a total of 20 years instead of 15 years and that the residual value should be increased to $9,300. Required: 1. Prepare the entry to record the purchase of the replacement blade. 2 Depreciation Method* SL DDB SL Date Jan 07, 2020 Record replacement/sale of old blade. Note: Enter debits before credits. Cost $50,000 33,000 12,000 $ 95,000 Est. Residual Est. Life $8,000 15 yrs. 4,000 1,200 General Journal 10 yrs 5 yrs Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
5
![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, 2020, the machine blade cracked and it was replaced with a new one costing $11,800 purchased for cash (the old blade
was scrapped). The new blade had an estimated residual value of $1,500 and an estimated life of five years and would continue to be
depreciated using the straight-line method. During 2020, it was determined that the useful life on the metal housing should be
increased to a total of 20 years instead of 15 years and that the residual value should be increased to $9,300.
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. 12/18
Jan. 12/18
Jan. 12/18
2
Date
Jan 07, 2020
Record replacement/sale of old blade.
Record entr
Note: Enter debits before credits.
Cost
$50,000
33,000
12,000
$ 95,000
General Journal
Total Depreciation expense
Est.
Residual Est. Life
$8,000 15 yrs.
4,000
1,200
Cash
Loss on disposal
Machine #5027 blade (new)
Machine #5027 - blade (old)
Accumulated depreciation, machine #5027 - blade
Debit
10 yrs
5 yrs
Credit
12,000
ew general journal
2. Calculate the total depreciation expense to be recorded on Machine #5027 for 2020.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F265ad2be-bd5c-4991-a37a-68bf89d25d09%2Fdb6033e4-08d6-4ef4-b5ee-cca3e53cdb3c%2Fr26gvp7_processed.png&w=3840&q=75)
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, 2020, the machine blade cracked and it was replaced with a new one costing $11,800 purchased for cash (the old blade
was scrapped). The new blade had an estimated residual value of $1,500 and an estimated life of five years and would continue to be
depreciated using the straight-line method. During 2020, it was determined that the useful life on the metal housing should be
increased to a total of 20 years instead of 15 years and that the residual value should be increased to $9,300.
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. 12/18
Jan. 12/18
Jan. 12/18
2
Date
Jan 07, 2020
Record replacement/sale of old blade.
Record entr
Note: Enter debits before credits.
Cost
$50,000
33,000
12,000
$ 95,000
General Journal
Total Depreciation expense
Est.
Residual Est. Life
$8,000 15 yrs.
4,000
1,200
Cash
Loss on disposal
Machine #5027 blade (new)
Machine #5027 - blade (old)
Accumulated depreciation, machine #5027 - blade
Debit
10 yrs
5 yrs
Credit
12,000
ew general journal
2. Calculate the total depreciation expense to be recorded on Machine #5027 for 2020.
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