Moreau Lock & Key Ltd. has a hefty investment in security equipment, as reported in the company's

Question:

Moreau Lock & Key Ltd. has a hefty investment in security equipment, as reported in the company's balance sheet at December 31, 2016:

Property, plant, and equipment, at cost:

Land ...................................................................................................................... $ 200,000

Buildings .................................................................................................................. 310,000

Less Accumulated depreciation ............................................................................ (40,000)

Security equipment ................................................................................................ 620,000

Less Accumulated depreciation ........................................................................... (370,000)

In early October 2017, Moreau Lock & Key purchased additional security equipment at a cost of $80,000. The company depreciates buildings by the straight-line method over

20 years with a residual value of $70,000. Due to obsolescence, security equipment has a useful life of only eight years and is being depreciated by the double-diminishing-balance method with zero residual value.


Requirements

1. How will Moreau Lock & Key's equipment purchase be recorded? What will the 2017 depreciation expense be?

2. Report property, plant, and equipment on the company's December 31, 2017, balance sheet?

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Related Book For  book-img-for-question

Financial Accounting

ISBN: 978-0134564142

6th Canadian edition

Authors: Walter Jr. Harrison, Charles T. Horngren, C. William Thomas, Greg Berberich, Catherine Seguin

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