The following selected events occurred for Orwell Company during the first quarter of 2016: Jan. 11 A motor breaks on a machine and is replaced for $2,400. This replacement was expected when the machine was purchased. Feb. 15 A machine breaks down unexpectedly and requires repairs of $700. Mar. 10 An accident damages some equipment. Repairs cost $2,000. 19 A motor breaks on a machine and is replaced for $900. The new motor is of an improved design that increases the capacity of the machine. 27 Office layout is rearranged at a cost of $700. At the same time, the walls are repainted for $500. Required: 1. Prepare journal entries for the preceding transactions. 2. Would any of your answers change if the company used IFRS? If so, how?
The following selected events occurred for Orwell Company during the first quarter of 2016: Jan. 11 A motor breaks on a machine and is replaced for $2,400. This replacement was expected when the machine was purchased. Feb. 15 A machine breaks down unexpectedly and requires repairs of $700. Mar. 10 An accident damages some equipment. Repairs cost $2,000. 19 A motor breaks on a machine and is replaced for $900. The new motor is of an improved design that increases the capacity of the machine. 27 Office layout is rearranged at a cost of $700. At the same time, the walls are repainted for $500. Required: 1. Prepare journal entries for the preceding transactions. 2. Would any of your answers change if the company used IFRS? If so, how?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 15E: The following are independent errors: a. In January 2019, repair costs of 9,000 were debited to the...
Related questions
Concept explainers
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Topic Video
Question
The following selected events occurred for Orwell Company during the first quarter of 2016:
| Jan. | 11 | A motor breaks on a machine and is replaced for $2,400. This replacement was expected when the machine was purchased. |
| Feb. | 15 | A machine breaks down unexpectedly and requires repairs of $700. |
| Mar. | 10 | An accident damages some equipment. Repairs cost $2,000. |
| 19 | A motor breaks on a machine and is replaced for $900. The new motor is of an improved design that increases the capacity of the machine. | |
| 27 | Office layout is rearranged at a cost of $700. At the same time, the walls are repainted for $500. |
| Required: | |
| 1. | Prepare |
| 2. | Would any of your answers change if the company used IFRS? If so, how? |
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 1 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
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College