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On July 1, 2020, Adams Company acquired a new machine for $ 200,000 and estimated that...

On July 1, 2020, Adams Company acquired a new machine for $ 200,000 and estimated that it would have a useful life of 10 years and residual value of $ 10,000. On January 2, 2022, Adams spent $ 31,500 to perform a major overhaul on the equipment which improved the efficiency of the machine by 20%. Due to this change, Adams believed that the machine should have a total useful life of 12 years and residual value should be increased by $ 4,000. On November 1, 2023, the machine was sold for $ 110,000. The company uses straight line method of depreciation and closes its book on December 31.
Required: 1. Calculate the carrying value of the equipment at December 31, 2021.
2. Calculate depreciation expense for 2022.
3. Prepare the journal entry on November 1, 2023.

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ekkarill92 answered 2 months ago
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