How do I find the answer to the last general journal entry on December 31, 2017.

Question

How do I find the answer to the last general journal entry on December 31, 2017.

2016

2017

Recorded annual straight-line depreciation on the loader.

Jan. 1 Paid $287,600 cash plus $11,500 in sales tax and $1,500 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $20,600 salvage value. Loader costs are recorded in the Equipment account. Jan. 3 Paid $4,800 to enclose the cab and install air-conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,400. Dec. 31 Recorded annual straight-line depreciation on the loader. Answer is complete and correct Date General Journal Debit Credit Jan 01, 2016 Equipment 300,600 Cash 300, 600 Jan 03, 2016 Equipment 4,800 Cash 4,800 Dec 31, 2016 Depreciation expense-Equipment 70,850 Accumulated depreciation-Equipment 70,850 4 Jan 01, 2017 Equipment 5,400 Cash 5400 Feb 17, 2017 Repairs expense-Equipment 820 Cash 820 Dec 31, 2017 Depreciation expense-Equipment 43,590 Accumulated depreciation-Equipment 43,590

Explanation / Answer

Depreciation on the equipment for Year 2017 is as calculaated below:

Depreciation for 2017 Cost of Equipment 300,600 Add: additional Cost 4,800 305,400 Less: Salvage Value (20,600+1,400) 22000 Cost minus salvage value 283,400 Useful Life 4 Depreciation for 2016 70850 Carrying Value of asset on Jan 2017 234,550 Add: additional cost 5,400 Equipment value 239,950 Less: Salvage Value (20,600+1,400) 22,000 Cost minus salvage value 217,950 Revised Useful Life 5 Depreciation for 2017 43,590

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