Homework Help is Here – Start Your Trial Now!
Business
Accounting
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
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
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.
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.
Expert Solution
steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
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.
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
SEE MORE TEXTBOOKS