Question
The following data relate to the Plant Assets account of Salih Inc. at December 31, 2019: A B C D Original cost $46,000 $58,000 $68,000
The following data relate to the Plant Assets account of Salih Inc. at December 31, 2019:
A B C D
Original cost $46,000 $58,000 $68,000 $73,000
Year purchased 2014 2015 2016 2017
Useful life 10 years 17,000 hours 15 years 10 years
Residual value $3,900 $4,450 $8,000 $4,700
Depreciation method straight-line activity straight-line double-declining
Accumulated depreciation through 2019 $21,050 $31,600 $12,000 $26,280
Note: In the year an asset is purchased, Salih does not record any depreciation expense on the asset. In the year an asset is retired or traded in, Salih takes a full year's depreciation on the asset. The following transactions occurred during 2020: 1. On May 5, Asset A was sold for $17,500 cash. 2. On December 31, it was determined that Asset B had been used 3,300 hours during 2020. 3. On December 31, before calculating depreciation expense on Asset C, Salih management decided that Asset C's remaining useful life should be tenyears as of year end. 4. On December 31, it was discovered that a piece of equipment purchased in 2019 had been expensed completely in that year. The asset cost $31,000, had a useful life of 10 years when it was acquired, and had no residual value. Management has decided to use the double-declining-balance method for this asset, which can be referred to as Asset E. Ignore income taxes. Instructions a. Prepare any necessary adjusting journal entries required at December 31, 2020(part 4),the sale in part 1, as well as any entries to record depreciation for 2020 for assets on hand at the end of 2020. Round all amounts to the nearest dollar.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started