Delta Manufacturing paid $62,000 to purchase a computerized assembly machine on January 1, 2016. The machine had
Question:
Delta Manufacturing paid $62,000 to purchase a computerized assembly machine on January 1, 2016. The machine had an estimated life of eight years and a $2,000 salvage value. Delta€™s financial condition as of January 1, 2019, is shown in the following financial statements model. Delta uses the straight-line method for depreciation.
Delta Manufacturing made the following expenditures on the computerized assembly machine in 2019:
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 2019 depreciation expense.
Required
a. Record the 2019 transactions in a statements model like the preceding one.
b. Prepare journal entries for the 2019 transactions.
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:
Fundamental Financial Accounting Concepts
ISBN: 978-0078025907
9th edition
Authors: Thomas Edmonds, Christopher Edmonds