Question

Help Save & E Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion Return At the end of the prior year ending on December 31, Year 1, O'Connor Company's records reflected the following for Machine Cost when acquired Accumulated depreciation $ 30,000 10.200 points At the beginning of January of the current year, the machine was renovated at a cost of $15,500. As a result, the estimated life increased from five years to eight years, and the residual value increased from $4,500 to $6,500. The company uses straight-line depreciation. Required: 1. Prepare the journal entry to record the renovation. 2. How old was the machine at the end of the prior year? 3. Give the adjusting entry at the end of the current year to record straight line depreciation for the year. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the journal entry to record the renovation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) < Prey 13 of 13 !!! Next > ticipation_...docx participation.....docx 9 2200_study.gu....pdf A SPIRITUALITY...pdf A L aub_abbr.pdf

Answer 1

Ans

1

Sr No	Date	Particulars	Dr Amount	Cr Amount
1	January	Machinery	15500
		Accumulated Depreciation	$450
		Depreciation		$450
		Cash/Bank		15500
		(Being Entry for substantial renovation of Machinery capitalized)

Working

Particulars	Amount
Cost	$30,000
Add : Cost of Improvement	$15,500
Salvage	6500
	$39,000
Life	$8
Dep per annuam	$4,875
Accumulated Dep	9750
Life Completed	2

2. Life of Assets the end of Prior Year

Particulars	Amount
Cost	$30,000
Salvage	$4,500
	$25,500
Life	5
Dep. per year	$5,100
Accumulated Dep	$10,200
Life Completed	2

3.

Sr No	Date	Particulars	Dr Amount	Cr Amount
2	December	Depreciation	$4,875
		Accumulated Depreciation		$4,875
		Being Depreciation for this year as per New Life and book value