Question
On April 1, 2019, the KB Toy Company purchased equipment to be used in its manufacturing process. The equipment cost $60,800, has an eight-year useful
On April 1, 2019, the KB Toy Company purchased equipment to be used in its manufacturing process. The equipment cost $60,800, has an eight-year useful life, and has no residual value. The company uses the straight-line depreciation method for all manufacturing equipment. On January 4, 2021, $15,200 was spent to repair the equipment and to add a feature that increased its operating efficiency. Of the total expenditure, $3,300 represented ordinary repairs and annual maintenance and $11,900 represented the cost of the new feature. In addition to increasing operating efficiency, the total useful life of the equipment was extended to 10 years. Required: 1. Prepare journal entries for the depreciation for 2019 and 2020. 2. Prepare journal entries for the 2021 expenditure. 3. Prepare journal entries for the depreciation for 2021.
- Required 1
- Required 2
- Required 3
Prepare journal entries for the depreciation for 2019 and 2020. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
| No | Date | General Journal | Debit | Credit |
|---|---|---|---|---|
| 1 | December 31, 2019 | Depreciation expenseselected answer correct | 7,600 incorrect | |
| Accumulated depreciation-equipmentselected answer correct | not attempted | not attempted | ||
| 2 | December 31, 2020 | Depreciation expense correct | ||
| Accumulated depreciation-equipment correct |
2.
Prepare journal entries for the 2021 expenditure. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
| No | Date | General Journal | Debit | Credit |
|---|---|---|---|---|
| 1 | January 04, 2021 | Repair and maintenance expense selected answer correct | ||
| Equipment answer correct | ||||
| Cash answer correct |
3. Prepare journal entries for the depreciation for 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
| No | Date | General Journal | Debit | Credit |
|---|---|---|---|---|
| 1 | December 31, 2021 | Depreciation expense answer correct | not attempted | not attempted |
| Accumulated depreciation-equipmentselected answer correct | not attempted | not attempted |
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Gleim CIA Review Part 3 Internal Audit Knowledge Elements
Authors: Irvin N. Gleim
2018 Edition
1618541153, 978-1618541154
