On January 1, 2017, Ranger Manufacturing Company purchased equipment that makes sustainable water bottles. The purchase price of the equipment was $300,000. In addition, Ranger paid $24,000 in sales tax, $1,000 in freight costs to have the equipment delivered, $2,000 for installation and testing, and $1,000 for an annual insurance policy to insure against potential casualty losses. The equipment is expected to have a 7-year useful life and salvage value of $40,000. Ranger uses the STRAIGHT LINE method of depreciation. REQUIRED: Read carefully and answer the questions below. You must show ALL of your work to receive partial credit. Incorrect answers without the supporting calculations will receive zero credit. Please label your work so it is easy to follow. WATCH THE DATES! All answers may be rounded to the nearest $1.

A. Prepare the adjusting journal entry to record depreciation expense for 2017.

B. How much accumulated depreciation is reported on the 12/31/2018 balance sheet?

C. On 1/1/2019, Ranger Company revised the estimated useful life to five years total and the salvage value to $50,000. How much is depreciation expense for the year ending 12/31/2019?

D. Ranger Company sold the equipment on April 1, 2020 for 150,000 cash. Prepare the necessary entries to update depreciation and then record the sale

Answer rating: 100% (QA)

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