Ocean Fishers Ltd. had a 22-foot fishing boat with an inboard motor that was purchased on April 9, 2012, for $77,000. The PPE subledger shows the following information regarding the boat:

On June 27, 2020, $63,000 cash was paid for a new motor to replace the old one, which was scrapped. The new motor had an estimated useful life of 12 years and a residual value of $4,200. Early in 2020, it was determined that the useful life of the boat?s fibreglass body should be adjusted to a total of 20 years with no change in the residual value.

Required

1. Record the appropriate entries regarding the

a. Purchase of the replacement motor on June 27, 2020, and

b. Depreciation taken on the fishing boat (body plus motor) on December 31, 2020, the company?s year-end.

2. Calculate total depreciation taken on the fishing boat (body plus motor) for the company?s year ended December 31, 2020.

Transcribed Image Text:

Fishing Boat – 22 Ft. with Inboard Motor: Date of Purchase Apг. 9/12 Apг. 9/12 Deprec. Est. Residual Est. Life 15 уг Component Fibreglass body Motor Method SL Cost $23,800 53,200 $7,000 -0- 10 уг SL $77,000