not change Required a. Prepare journal entries to record (1) the purchase of the machine. (2) 2013 depreciation expense, (3) 2018 depreciation expense, (4) the 2019 improvements, and (5) 2019 depreciation expense, Calculate the book value of the machine at the end of 2019 (that is, after recording the deprecia. tion expense for 2019). b. Kate's Cards SERIAL PROBLEM: KATE'S CARDS (Note: This is a continuation of the Serial Problem: Kate's Cards from Chapters / through 8.) SP9. Kate's business is growing faster than she had predicted. In order to keep up, she will need to purchase improved computer hardware. Kate has learned that the software that she uses runs much faster if her computer has a lot of memory. In addition, her files are very large and she is running out of free space on her existing hard drive. Finally, Kate has heard horror stories about hard disk drive crashes and the possibility that all of her work will be destroyed. In order to protect against this possibility, she has decided to invest in a large commercial grade backup system. The cost of the memory and hard disk drive upgrade to Kate's computer will total $420. The cost of the backup system is $3,000. The memory and hard disk upgrade will increase the productivity of Kate's current computer; however, it will not extend its useful life. The backup system is expected to have a five-year useful life. Kate would like to know the following items: 1. How should the expenditure for the memory and hard disk drive upgrade be recorded? Provide the journal entry. 2. Kate's current computer has 42 months remaining for depreciation purposes (under the straight-line method). The original cost of the computer was $4,300 and had a four-year useful life. The current monthly depreciation is $100. How will this current expenditure affect the monthly depreciation? 3. Kate would like to know how depreciation on the backup system under both the straight-line method and the double-declining method differ. She is assigning a $500 salvage value to the equip ment. Construct a table showing yearly depreciation under both methods. not change Required a. Prepare journal entries to record (1) the purchase of the machine. (2) 2013 depreciation expense, (3) 2018 depreciation expense, (4) the 2019 improvements, and (5) 2019 depreciation expense, Calculate the book value of the machine at the end of 2019 (that is, after recording the deprecia. tion expense for 2019). b. Kate's Cards SERIAL PROBLEM: KATE'S CARDS (Note: This is a continuation of the Serial Problem: Kate's Cards from Chapters / through 8.) SP9. Kate's business is growing faster than she had predicted. In order to keep up, she will need to purchase improved computer hardware. Kate has learned that the software that she uses runs much faster if her computer has a lot of memory. In addition, her files are very large and she is running out of free space on her existing hard drive. Finally, Kate has heard horror stories about hard disk drive crashes and the possibility that all of her work will be destroyed. In order to protect against this possibility, she has decided to invest in a large commercial grade backup system. The cost of the memory and hard disk drive upgrade to Kate's computer will total $420. The cost of the backup system is $3,000. The memory and hard disk upgrade will increase the productivity of Kate's current computer; however, it will not extend its useful life. The backup system is expected to have a five-year useful life. Kate would like to know the following items: 1. How should the expenditure for the memory and hard disk drive upgrade be recorded? Provide the journal entry. 2. Kate's current computer has 42 months remaining for depreciation purposes (under the straight-line method). The original cost of the computer was $4,300 and had a four-year useful life. The current monthly depreciation is $100. How will this current expenditure affect the monthly depreciation? 3. Kate would like to know how depreciation on the backup system under both the straight-line method and the double-declining method differ. She is assigning a $500 salvage value to the equip ment. Construct a table showing yearly depreciation under both methods
