Question
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
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. | |
2014 | Dec. 31 | Recorded 2013 depreciation. |
2015 | Jan. 1 | Paid $300 for an upgrade of the computer. This expenditure is expected to increase the operating efficiency and capacity of the computer. |
Prepare the necessary entries. (Show computations.)
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Fundamental Accounting Principles
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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