Question
Pete's Propellers Company showed the following information in its Property, Plant, and Equipment Subledger regarding Machine #5027. Machine #5027 Component Single metal housing Motor
Pete's Propellers Company showed the following information in its Property, Plant, and Equipment Subledger regarding Machine #5027. Machine #5027 Component Single metal housing Motor Date of purchase Jan. 12/18 Depreciation Method* Est. Jan. 12/18 SL DDB Blade Jan. 12/18 SL Cost $ 68,000 28,000 8,920 $104,920 Residual Est.Life $ 8,000 6,000 1,600 15 yrs 10 yrs 5 yrs *SL = Straight-line; DDB = Double-declining-balance On January 7, 2020, the machine blade cracked and it was replaced with a new one costing $14,200 purchased for cash (the old blade was scrapped). The new blade had an estimated residual value of $2,000 and an estimated life of five years and would continue to be depreciated using the straight-line method. During 2020, it was determined that the useful life on the metal housing should be increased to a total of 20 years instead of 15 years and that the residual value should be increased to $10,500. Required: 1. Prepare the entry to record the purchase of the replacement blade. Answer is complete and correct. No 1 Date Jan 07, 2020 General Journal Debit Credit Machine #5027-blade (new) 14,200 Cash 14,200 2 Jan 07, 2020 Accumulated depreciation, machine #5027 -blade Loss on disposal Machine #5027-blade (old) 2,928 5,992 8,920
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started