Pete's Propellers Company showed the following information in its Property, Plant, and Equipment Subledger regarding Machine #5027. Machine #5027 Component Single metal housing Motor Blade Date of Depreciation purchase Method AT Jan. 12/21 SL Jan. 12/21 DDB Jan. 12/21 SL View transaction list Cost $ 70,000 27,000 8,320 $105,320 Est. Residual Est. Life $10,000 6,000 1,600 *SL = Straight-line; DDB = Double-declining-balance On January 7, 2023, the machine blade cracked and it was replaced with a new one costing $14,000 purchased for cash (the old blade was scrapped). The new blade had an estimated residual value of $2,000 and an estimated life of five years and would continue to be depreciated using the straight-line method. During 2023, it was determined that the useful life on the metal housing should be increased to a total of 18 years instead of 15 years and that the residual value should be increased to $10,400. Required: 1. Prepare the entry to record the purchase of the replacement blade. Journal entry worksheet 15 yrs 10 yrs 5 yrs

Pete's Propellers Company showed the following information in its Property, Plant, and Equipment Subledger regarding Machine #5027. Machine #5027 Component Single metal housing Motor Blade Date of Depreciation purchase Method AT Jan. 12/21 SL Jan. 12/21 DDB Jan. 12/21 SL View transaction list Cost $ 70,000 27,000 8,320 $105,320 Est. Residual Est. Life $10,000 6,000 1,600 *SL = Straight-line; DDB = Double-declining-balance On January 7, 2023, the machine blade cracked and it was replaced with a new one costing $14,000 purchased for cash (the old blade was scrapped). The new blade had an estimated residual value of $2,000 and an estimated life of five years and would continue to be depreciated using the straight-line method. During 2023, it was determined that the useful life on the metal housing should be increased to a total of 18 years instead of 15 years and that the residual value should be increased to $10,400. Required: 1. Prepare the entry to record the purchase of the replacement blade. Journal entry worksheet 15 yrs 10 yrs 5 yrs

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 3MCQ: When depreciation is recorded each period, what account is debited? a. Depreciation Expense b. Cash...

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