ABC company pays $262,500 for equipment expected to last four years and have a $30,000 salvage value. Prepare journal entries to record the following costs related to the equipment: 1.During the second year of the equipment’s life, $21,000 cash is paid for for a new component expected to increase the equipment’s productivity by 10% a year. 2. During the 3rd year ,$5,250 cash is paid for normal repairs necessary to keep the equipment in good working order. 3. During the 4th year, $13,950 is paid for repairs expected to increase the useful life of the equipment from 4 to 5 years.
ABC company pays $262,500 for equipment expected to last four years and have a $30,000 salvage value. Prepare journal entries to record the following costs related to the equipment: 1.During the second year of the equipment’s life, $21,000 cash is paid for for a new component expected to increase the equipment’s productivity by 10% a year. 2. During the 3rd year ,$5,250 cash is paid for normal repairs necessary to keep the equipment in good working order. 3. During the 4th year, $13,950 is paid for repairs expected to increase the useful life of the equipment from 4 to 5 years.
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 13PA: Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value...
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ABC company pays $262,500 for equipment expected to last four years and have a $30,000 salvage value. Prepare
1.During the second year of the equipment’s life, $21,000 cash is paid for for a new component expected to increase the equipment’s productivity by 10% a year.
2. During the 3rd year ,$5,250 cash is paid for normal repairs necessary to keep the equipment in good working order.
3. During the 4th year, $13,950 is paid for repairs expected to increase the useful life of the equipment from 4 to 5 years.
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