Question

Find the answer to the last general journal entry on December 31, 2017.

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 to 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.

2017

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 backed it into a tree.
Dec. 31 Recorded annual straight-line depreciation on the loader.

Answer 1

Answer:

Kindly find the details of  Depreciation on the equipment for Year 2017 computed below in the explanation section

Explanation:

Solution

Depreciation on the equipment for Year 2017 is as computed as follows:

Depreciation for 2017

Cost of Equipment                                 300,600

Add: additional Cost                         4,800

305,400

Less: Salvage Value (20,600+1,400) 22000

Cost minus salvage value                  283,400

Useful Life                                               4

Depreciation for 2016                          70850

Carrying Value of asset on Jan 2017 234,550

Add: additional cost                          5,400

Equipment value                                  239,950

Less: Salvage Value (20,600+1,400)   22,000

Cost minus salvage value                  217,950

Revised Useful Life                              5

Depreciation for 2017                          43,590