Expenditures After Acquisition
Roanoke Manufacturing placed a robotic arm on a large assembly machine on January 1, 2019. At that time, the assembly machine was expected to last another 3 years. The following information is available concerning the assembly machine.
The robotic arm cost $225,000 and was expected to extend the useful life of the machine by 3 years. Therefore, the useful life of the assembly machine, after the arm replacement, is 6 years. The assembly machine is expected to have a residual value of $120,000 at the end of its useful life.
Required:
1. Prepare the
2. Compute 2019
3. What is the book value of the machine at the end of 2019?
4. CONCEPTUAL CONNECTION What would have been the effect on the financial statements if Roanoke had expensed the addition of the robotic arm?
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Cornerstones of Financial Accounting