Anterra Company had a 22-foot fishing boat with an inboard motor that was purchased on April 9, 2006, for $77,000. The PPE Sub ledger shows the following information regarding the boat:

On June 27, 2014, $63,000 cash was paid for a new motor to replace the old one, which was scrapped. The new motor had an estimated useful life of 12 years and a residual value of $4,200. Early in 2014, it was determined that the useful life of the boat’s fiberglass body should be adjusted to a total of 20 years with no change in the residual value.

Required
1. Record the appropriate entries regarding the
a. Purchase of the replacement motor on June 27, 2014, and
b. Depreciation taken on the fishing boat (body plus motor) on December 31, 2014, the company’s year-end.
2. Calculate total depreciation taken on the fishing boat (body plus motor) for the company’s year ended December 31,2014.

Transcribed Image Text:

Fishing Boat -22 Foot With Inboard Motor: Date of Deprec Purchase Method Apr. 9/06 Apr. 9/06 Est. Residual Component Cost $23,800 577,000 Est. Life 15 yr 10 yr Fibreglass body Motor SL $7,000 SL 3,200