Kaolin Manufacturing has an incinerator that originally cost $187,200 and now has accumulated depreciation of $132,800. The

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Kaolin Manufacturing has an incinerator that originally cost $187,200 and now has accumulated depreciation of $132,800. The incinerator has completed its 15th year of service in an estimated useful life of 20 years. At the beginning of the 1 6th year, the company spent $42,800 repairing and modernizing the incinerator to comply with pollution-control standards. Therefore, the incinerator is now expected to last 1 0 more years instead of 5. It will not, however, have more capacity than it did in the past or a residual value at the end of its useful life.

1 . Prepare the entry in journal form to record the cost of the repair.

2. Compute the carrying value of the incinerator after the entry.

3. Prepare the entry to record straight-line depreciation for the current year. Lo1

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Financial Accounting

ISBN: 9780618310746

8th Edition

Authors: Belverd E. Needles Jr,, Marian Powers

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