Question

Foley Word Processing Service uses the straight-line method of depreciation. The company's fiscal year end is...

Foley Word Processing Service uses the straight-line method of depreciation. The company's fiscal year end is December 31. The following transactions and events occurred during the first three years.

2020    July     1     Purchased a computer from the Computer Center for $1,900 cash plus sales tax of $150, and shipping costs of $50.

            Nov.    3     Incurred ordinary repairs on computer of $140.

            Dec. 31     Recorded 2020 depreciation on the basis of a four-year life and estimated salvage value of $500.

2021    Dec. 31     Recorded 2021 depreciation.

2022    Jan.     1     Paid $300 for an upgrade of the computer. This expenditure is expected to increase the operating efficiency and capacity of the computer.

            Dec. 31      The computer (assuming same salvage value and useful life) with book value of $1,325 was sold for $1,025 cash.

Instructions

Prepare the necessary entries. (Show computations.)

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Foley Word Processing Service uses the straight-line method of depreciation. The company's fiscal year end is...
Foley Word Processing Service uses the straight-line method of depreciation. The company's fiscal year end is December 31. The following transactions and events occurred during the first three years. 2013 July 1 Purchased a computer from the Computer Center for $1,900 cash plus sales tax of $150, and shipping costs of $50. Nov. 3 Incurred ordinary repairs on computer of $140. Dec. 31 Recorded 2013 depreciation on the basis of a four year life and estimated salvage value of $500....
Champion Contractors completed the following transactions involving equipment. Year 1 Jan. 1 Paid $302,000 cash plus...
Champion Contractors completed the following transactions involving equipment. Year 1 Jan. 1 Paid $302,000 cash plus $12,080 in sales tax and $1,800 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $30,200 salvage value. Loader costs are recorded in the Equipment account. Jan. 3 Paid $5,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by...
Sheridan Company has a December 31 year end and uses straight-line depreciation for all property, plant,...
Sheridan Company has a December 31 year end and uses straight-line depreciation for all property, plant, and equipment. On July 1, 2019, the company purchased equipment for $530,000. The equipment had an expected useful life of 10 years and no residual value. The company uses the nearest month method for partial year depreciation. On December 31, 2020, after recording annual depreciation, Sheridan reviewed its equipment for possible impairment. Sheridan determined that the equipment has a recoverable amount of $246,000. It...
2) Equipment was purchased at the beginning of 2019 for $900,000. At the time of its...
2) Equipment was purchased at the beginning of 2019 for $900,000. At the time of its purchase, the equipment was estimated to have a useful life of five years and a salvage value of $100,000. The equipment was depreciated using the straight-line method of depreciation through 2021. At the beginning of 2022, the estimate of useful life was revised to a total life of seven years and the expected salvage value was changed to $42,500. The amount to be recorded...
Sale of an asset Suarez Company uses the straight-line method of depreciation. The company purchased a...
Sale of an asset Suarez Company uses the straight-line method of depreciation. The company purchased a computer system on January 1, Year 1, for $1,600,000 with an expected life of six years and a salvage value of $130,000. Assuming the computer is sold on July 1, Year 3 for $1,000,000 cash, prepare the journal entries to record depreciation for the first 6 months of Year 3 and the sale of the computer.
Suarez Company uses the straight-line method of depreciation. The company purchased a computer system on January...
Suarez Company uses the straight-line method of depreciation. The company purchased a computer system on January 1, Year 1, for $1,600,000 with an expected life of six years and a salvage value of $130,000. Assuming the computer is sold on July 1, Year 3 for $1,000,000 cash, prepare the journal entries to record depreciation for the first 6 months of Year 3 and the sale of the computer.
Suarez Company uses the straight-line method of depreciation. The company purchased a computer system on January...
Suarez Company uses the straight-line method of depreciation. The company purchased a computer system on January 1, Year 1, for $1,600,000 with an expected life of six years and a salvage value of $130,000. Assuming the computer is sold on July 1, Year 3 for $1,000,000 cash, prepare the journal entries to record depreciation for the first 6 months of Year 3 and the sale of the computer. Can u please put it in a chart so I know how...
Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in...
Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business. 2016 Jan. 1 Paid $306,000 cash plus $12,240 in sales tax and $1,900 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $30,600 salvage value. Loader costs are recorded in the Equipment account. Jan. 3 Paid $7,000 to enclose the cab and install air conditioning in the loader to enable operations...
Problem 8-4A Computing and revising depreciation; revenue and capital expenditures LO C1, C2, C3 Champion Contractors...
Problem 8-4A Computing and revising depreciation; revenue and capital expenditures LO C1, C2, C3 Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business. 2016 Jan. 1 Paid $287,600 cash plus $11,500 in sales tax and $1,500 in transportation (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...
Vogel Manufacturing has a December 31 year end and uses the straight-line method for depreciating its...
Vogel Manufacturing has a December 31 year end and uses the straight-line method for depreciating its equipment and the double-diminishing-balance method for its trucks. Vogel began 2021 with a single piece of equipment that had been purchased on January 1, 2020, for $255,000 and a truck that had been purchased on January 1, 2019, for $148,000. When the equipment was purchased, Vogel's management had estimated that it would have a residual value of $15,000 and a useful life of five...