188. In year one, McClintock Co. acquired a truck that cost $75,500 with an estimated $14,000 salvage value and 4 year estimated useful life. Depreciation in the first year was $15,375. McClintock had the following transactions involving plant assets during Year 2. Unless otherwise indicated, all transactions were for cash.
Jan. 5
Paid $5,000 to put a new engine in the truck that is expected to make the truck run more efficiently and increase the truck’s useful life by one year. The salvage value did not change.
Mar. 1
Paid $2,000 to replace a broken tailgate that was damaged when a heavy carton was inadvertently dropped on it.
Dec. 31
Recorded straight-line depreciation on the truck.
Prepare the general journal entries to record these transactions.
189. A company purchased a cooling system on January 2 for $225,000. The system had an estimated useful life of 15 years. On January 3 of the thirteenth year, the company completed a renovation of the system at a cost of $33,000 and now expects the system to be more efficient and last 8 years beyond the original estimate. The company uses the straight-line method of depreciation.(a) Prepare the journal entry at January 3, to record the renovation of the cooling system.(b) Prepare the journal entry at December 31, to record the revised depreciation for the thirteenth year.
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