Question

On November 12, 2013, Josselin Inc. purchased a new front-end loader for $275,000 cash. Management estimated that the loader would have a useful life of 10 years and a residual value of $25,000. Near the end of fiscal 2017, management reassessed the useful life of the loader and decided that because the workload of the loader was much heavier than originally expected, its useful life would probably be about eight years and the residual value about $35,000. Josselin’s year-end is October 31 and the company uses straight-line depreciation for this type of asset.

Required:
a. Prepare the journal entry to record the purchase of the loader in 2013.
b. What journal entry would be made in 2017 to reflect the change in the estimated useful life of the loader?
c. What would the depreciation expense for the loader be in fiscal 2014? Prepare the journal entry to record the depreciation expense.
d. What would the depreciation expense for the loader be in fiscal 2018? Prepare the journal entry to record the depreciation expense.
e. Suppose the loader was sold in on January 31, 2020 for $42,000. Prepare the journal entry to record the sale.



$1.99
Sales4
Views153
Comments0
  • CreatedFebruary 26, 2015
  • Files Included
Post your question
5000