Question
Mark's Repair 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
Mark's Repair 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.
2021July1Purchased equipment from the Equipment Center for $5,500 cash plus sales tax of $305, and shipping costs of $250.Nov.3Incurred ordinary repairs on computer of $240.Dec.31Recorded 2021 depreciation on the basis of a four-year life and estimated salvage value of $455.2022Dec.31Recorded 2022 depreciation.2023Jan.1Paid $1,800 for a major upgrade of the equipment. This expenditure is expected to increase the operating efficiency and capacity of the equipment.
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