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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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