Bird Manufacturing paid $62,000 to purchase a computerized assembly machine on January 1, 2013. The machine had
Question:
Bird Manufacturing paid $62,000 to purchase a computerized assembly machine on January 1, 2013. The machine had an estimated life of eight years and a $2,000 salvage value. Bird’s financial condition as of January 1, 2016, is shown in the following financial statements model. Bird uses the straight-line method for depreciation.
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Bird Manufacturing made the following expenditures on the computerized assembly machine in 2016:
Jan. 2 Added an overdrive mechanism for $8,000 that would improve the overall quality of the performance of the machine but would not extend its life. The salvage value was revised to $2,500.
Aug. 1 Performed routine maintenance, $1,250.
Oct. 2 Replaced some computer chips (considered routine), $800.
Dec. 31 Recognized 2016 depreciation expense.
Required
a. Record the 2016 transactions in a statements model like the preceding one.
b. Prepare journal entries for the 2016transactions.
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
Step by Step Answer:
a NC Net Change in Cash Bird Manufacturing Statements Model Assets Stockholders Equ...View the full answer
Fundamental financial accounting concepts
ISBN: 978-0078025365
8th edition
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward
