Question: At the end of 2016 Spindle Works Inc owned a

At the end of 2016, Spindle Works Inc. owned a piece of equipment that had originally cost $21,000. It was being depreciated by the straight-line method, and had $8,500 of accumulated depreciation recorded as at the end of 2016 after the yearly depreciation was recorded. At the beginning of 2017, the equipment was extensively refurbished at a cost of $9,500. As a result of this work, the equipment’s productivity was significantly improved, its total estimated useful life was increased from the initial 10 years to 14 years, and its residual value was increased from the initial estimate of $4,000 to $7,000.
a. Calculate the age of the equipment at the end of 2016.
b. Give the journal entry to record the refurbishment of the equipment at the beginning of 2017.
c. Give the adjusting entry to record the depreciation of the equipment at the end of 2017.

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  • CreatedJune 11, 2015
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