Question

Brainium Technologies showed the following information in its Property, Plant and Equipment Sub-ledger regarding a warehouse.


During 2014, it was determined that the original useful life on the warehouse doors should be reduced to a total of 12 years and that the residual value should be $23,100. On January 3, 2014, the furnace broke down unexpectedly. It was replaced the next day with a new one costing $39,000, purchased on account (the old furnace was scrapped). The new furnace had an estimated residual value of $7,500 and an estimated life of 16 years and would continue to be depreciated using the double-declining-balance method.

Required
1. Prepare the entry to record the purchase of the new furnace.
2. Calculate the total depreciation expense to be recorded on the warehouse for2014.


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  • CreatedJanuary 08, 2015
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