# F 9Prepare journal entries to record ((3) 2018 depreciation expense, (4) the 2019 impb.Calculate the book value of the machine at the end of 2019 (that is, after recording the depreciaRequiredPenscSxpenseEYdisputa.locateof thetion expense for 2019).accoSERIAL PROBLEM: KATE'S CARDS(Note: This is a continuation of the Serial Problem: Kate's Cards from Chapters 1 through 8.)\$150empquaSiteKate's business is growing faster than she had predicted. In order to keep up, she will need to purchaseimproved computer hardware. Kate has learned that the software that she uses runs much faster if hercomputer has a lot of memory. In addition, her files are very large and she is running out of free spaceon her existing hard drive. Finally, Kate has heard horror stories about hard disk drive crashes and theSP9.orKate'spossibility that all of her work will be destroyed. In order to protect against this possibility, she hasCardsanexthThe cost of the memory and hard disk drive upgrade to Kate's computer will total \$420. The costof the backup system is \$3,000. The memory and hard disk upgrade will increase the productivity fKate's current computer; however, it will not extend its useful life. The backup system is expected todecided to invest in a large commercial grade backup system.have a five-year useful life.Kate would like to know the following items:1. How should the expenditure for the memory and hard disk drive upgrade be recorded? Provide thejournal entry.2. Kate's current computer has 42 months remaining for depreciation purposes (under the straight-linemethod). The original cost of the computer was \$4,800 and had a four-year useful life. The curntmonthly depreciation is \$100. How will this current expenditure affect the monthly depreciation!3. Kate would like to know how depreciation on the backup system under both the straight-linemethod and the double-declining method differ. She is assigning a \$500 salvage value to the equin-ment. Construct a table showing yearly depreciation under both methods.

Question

1 through 3

Step 1
1.

Expenditure for the memory and hard disk drive upgrade is a capital expenditure because it increases the efficiency of the computer and backup system are different asset thus, the journal entries are as follows:

Step 2

2.

Depreciation is calculated as follows:

Thus, the current de...

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