On April 1, 2019, the KB Toy Company purchased equipment to be used in its...
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Accounting
On April 1, 2019, the KB Toy Company purchased equipment to be used in its manufacturing process. The equipment cost $59,800, has an ten-year useful life, and has no residual value. The company uses the straight-line depreciation method for all manufacturing equipment. On January 4, 2021, $14,750 was spent to repair the equipment and to add a feature that increased its operating efficiency. Of the total expenditure, $3,200 represented ordinary repairs and annual maintenance and $11,550 represented the cost of the new feature. In addition to increasing operating efficiency, the total useful life of the equipment was extended to 12 years. Required:
1. Prepare journal entries for the depreciation for 2019 and 2020. 2. Prepare journal entries for the 2021 expenditure. 3. Prepare journal entries for the depreciation for 2021.
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