You have an air conditioning unit in your plant that cost $95,000. You estimated its useful life at 7 years and expected to receive $13,000 when you sold it at the end of the 7 years. The air conditioner is 5 years old and has accumulated depreciation of $60,000. You have just replaced the compressor unit in the air conditioner because the old one was too small to handle the load. It cost $30,000 to replace the compressor. Because of this new compressor you now estimate that the air conditioner will last 5 more years. (A total 10 years instead of the original estimate of 7.) You do not think you will get any more for the air conditioner when you sell it than the original estimate. Show the Journal Entry for the $30,000 upgrade of the unit. You paid for the upgrade with cash.
2007-05-09
13:46:52
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1 answers
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Anonymous