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On 1/1/20X1, Illini acquires equipment for $100,000 with an expected life of 10 years and an expected residual value of $7,000. Illini also spends $10,000
- On 1/1/20X1, Illini acquires equipment for $100,000 with an expected life of 10 years and an expected residual value of $7,000. Illini also spends $10,000 customizing the equipment to increase its efficiency. Illini elects the double declining balance method to account for the equipment. The annual maintenance for the equipment routinely performed in December costs Illini $2,000 in 20X1.
- On 1/1/20X2, Illini decides that it is more appropriate to use the straight line method to account for the equipment. On 6/31/20X2, Illini sells the equipment for $80,000. Hint: ignore the maintenance that has not been performed for 20X2.
Project 1.4 Part 2 Balance Sheet
Date | Account Name | Debit | Credit | |
1/1/20X1 | Equipment | [A] | ||
Cash | [B] | |||
1/1/20X1 customization: | Equipment | [C] | ||
Cash | [D] | |||
12/31/20X1 | Depreciation expense | [E] | ||
Accumulated depreciation-Equipment | [F] | |||
12/31/20X1 | Maintenance expense | [G] | ||
Cash | [H] | |||
6/31/20X2 | Depreciation expense | [I] | ||
Accumulated depreciation-Equipment | [J] | |||
6/31/20X2 | Cash | [K] | ||
Accumulated depreciation-Equipment | [L] | |||
Loss | [M] | |||
Equipment | [N] |
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