Business, 25.02.2020 01:03 brooke0713

Paid $290,000 cash plus $11,600 in sales tax and $1,700 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $29,000 salvage value. Loader costs are recorded in the Equipment account.

2016

Jan. 1 Paid $290,000 cash plus $11,600 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 $29,000 salvage value. Loader costs are recorded in the Equipment account.
Jan. 3 Paid $5,000 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 $1,500.
Dec. 31 Recorded annual straight-line depreciation on the loader.

2017

Jan. 1 Paid $4,100 to overhaul the loader’s engine, which increased the loader’s estimated useful life by two years.
Feb. 17 Paid $1,025 to repair the loader after the operator backed it into a tree.
Dec. 31 Recorded annual straight-line depreciation on the loader.

Required:

Prepare journal entries to record these transactions and events.

1. Paid $290,000 cash plus $11,600 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 $29,000 salvage value. Loader costs are recorded in the Equipment account.

2. Paid $5,000 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 $1,500

3. Recorded annual straight-line depreciation on the loader

4. Paid $4,100 to overhaul the loader’s engine, which increased the loader’s estimated useful life by two years.

5. Paid $1,025 to repair the loader after the operator backed it into a tree.

6. Recorded annual straight-line depreciation on the loader

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