Champion Contractors completed the following transactions involving equipment. Year 1 Paid $314,000 cash plus $12,560 in sales tax and $1,900 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $31,400 salvage value. Loader costs are recorded in the Equipment January 1 account. January 3 Paid $6,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,800. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $4,500 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 Paid $1,125 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded ahnual straight-line depreciation on the loader. Required: Prepare journal entries to record these transactions and events.
Champion Contractors completed the following transactions involving equipment. Year 1 Paid $314,000 cash plus $12,560 in sales tax and $1,900 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $31,400 salvage value. Loader costs are recorded in the Equipment January 1 account. January 3 Paid $6,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,800. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $4,500 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 Paid $1,125 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded ahnual straight-line depreciation on the loader. Required: Prepare journal entries to record these transactions and events.
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 2EB: Johnson, Incorporated had the following transactions during the year: Purchased a building for...
Related questions
Question
Question 6
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
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
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning