On January 1, 20-1, two flight simulators were purchased by a space camp for $68,000 each with
Question:
On January 1, 20-1, two flight simulators were purchased by a space camp for $68,000 each with a salvage value of $4,000 each and estimated useful lives of eight years. On January 1, 20-2, the hydraulic system for Simulator A was replaced for $3,000 cash and an updated computer for more advanced students was installed in Simulator B for $10,000 cash. The hydraulic system is expected to extend the life of Simulator A three years beyond the original estimate.
REQUIRED
1. Using the straight-line method, prepare general journal entries for depreciation on December 31, 20-1, for Simulators A and B.
2. Enter the transactions for January 20-2 in a general journal.
3. Assuming no other additions, improvements, or replacements, calculate the depreciation expense for each simulator for 20-2 through 20-8.
Salvage ValueSalvage 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:
1 2 3 January 1 202 account balances A B Simulator 68000 78000 Accumulated de...View the full answer
