Computing and revising depreciation; revenue and capital expenditures LO2 LO4 LO5
Champion Contractors completed the following transactions and events involving the purchase and operation
of equipment in its business.
2009
Jan. 1 Paid $287,600 cash plus $11,500 of sales tax and $1,500 of transportation-in (FOB shipping
point) for a new loader. The loader is estimated to have a four-year life and a $20,600 salvage
value. Loader costs are recorded in the Equipment account.
Jan. 3 Paid $4,800 to enclose the cab and install air conditioning in the loader to enable operations under
harsher conditions. This increased the estimated salvage value of the loader by another $1,400.
Dec. 31 Recorded annual straight-line depreciation on the loader.
Check Dec. 31, 2009, Dr. Depr.
Expense—Equip., $70,850
2010
Jan. 1 Paid $5,400 to overhaul the loader’s engine, which increased the loader’s estimated useful life
by two years.
Feb. 17 Paid $820 to repair the loader after the operator backs it into a tree.
Dec. 31 Recorded annual straight-line depreciation on the loader.
Required
Prepare journal entries to record these transactions and events.
Dec. 31, 2010, Dr. Depr.
Expense—Equip., $43,590
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.