Question

Maxil Contractors completed the following transactions and events involving the purchase and operation of equipment in its business.
2010
Jan. 1 Paid $293,660 cash plus $11,740 in sales tax and $1,500 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $36,000 salvage value. Loader costs are recorded in the Equipment account.
Jan. 3 paid $5,100 to enclose the cab and install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,000.
Dec. 31 Recorded annual straight-line depreciation on the loader.
2011
Jan. 1 paid $4,500 to overhaul the loader’s engine, which increased the loader’s estimated useful life by two years.
Feb. 17 paid $1,125 to repair the loader after the operator backs it into a tree.
Dec. 31 Recorded annual straight-line depreciation on the loader.
Required
Prepare journal entries to record these transactions and events.


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  • CreatedMarch 18, 2015
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