Salter Street Films Company showed the following information in its Property, Plant and Equipment Sub ledger regarding Machine #5027.

On January 7, 2014, the machine blade cracked and it was replaced with a new one costing $10,400 purchased for cash (the old blade was scrapped). The new blade had an estimated residual value of $1,000and an estimated life of five years and would continue to be depreciated using the straight-line method. During 2014, it was determined that the useful life on the metal housing should be increased to a total of 20 years instead of 15 years and that the residual value should be increased to $8,600.

1. Prepare the entry to record the purchase of the replacement blade.
2. Calculate the total depreciation expense to be recorded on Machine #5027 for2014.

  • CreatedJanuary 08, 2015
  • Files Included
Post your question