Manrow Growers, INC, owns equipment for sowing and harvesting its organic fruit, vegetables, and tree nuts that are sold to local restaurants and grocery stores. At the beginning of this year, an asset account for the company showed the following balances: Equipment$-$$$370,000,$ Accumulated depreciation through the end of last year$-$$$127,500.$ During the current year, the following expenditures were incurred for the equipment: Major overhaul of the equipment on Jan $1$ of the current year that improved efficiency: $$49,000,$ Routine maintenance and repairs on equipment$-$$$4,500.$ The equipment is being depreciated on a straight$-$line basis over an estimated life of $8$ years with a $$30,000$ estimated residual value. The annual accounting period ends on December $31.$ Part $1.$ Prepare the adjusting entry that was made at the end of last year for the depreciation on the equipment. $\{$Journal entry$\}/$ Part $2.$ Starting at the beginning of the current year, what is the remaining estimated life? $/$ Part $3.$ Prepare the journal entries to record the two expenditures during the current year. $($a$.$ Record the expenditure for the major overhaul of the equipment. $/$ b$.$ Record the expenditure for routine maintenance and repairs on the equipment.

Answer rating: 100% (QA)

Manrow Growers Inc Equipment Depreciation Part 1 Adjusting Entry for Prior Year Depreciation Since the information provided is for the current year we ... View the full answer