Problem:
Please provide information on how to process computing and revising depreciation; revenue and capital expenditures. A sample template or the link to a similar problem from the solution library would be helpful.
Fundamental Accounting Principals, 18th Edition
Wild, Larson, Chiappetta, McGraw-Hill Irwin
Problem 1: Computing and revising depreciation; revenue and capital expenditures.
Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business.
2007
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 cost 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.
2008
Jan. 1 Paid $5,400 to overhaul the loader's engine, which increased the loader's estimated useful life by two years.
Feb. 17 Paid $820 to repair the loader after the operator backs it into a tree.
Dec. 31 Recorded annual straight-line depreciation on the loader.
Required: Prepare journal entries to record these transactions and events.