ReeseCO is a sole proprietorship specializing in manufacturing high-tech sheet-metal products for the computer industry. They have just received a five year contract from a major computer manufacturing company to provide the computer sheet-metal cases to them for five years. To make these cases the company is buying a new Hydraulic Press Brake. The price of the new equipment is $22,000 and it has a physical life estimated to be eight years with a salvage value of $3,000 at the end of that period. ReeseCO will have no further use for the break after they complete the contract and plan to sell it with an estimated salvage value of $7,000.

Required 16 pts:

Assume they buy the break and put it into operation on 1/1/X1. The company uses 200% double declining balance to depreciate all equipment. Make the required adjusting entry on 12/31/X1 and on 1231/X2 to record the depreciation on the break.

DATE	ACCOUNT	DR	CR