Question: A company purchased a heating system on January 2, 1992, at a list price of $300,000 less a trade discount of for $75,000. The system had an estimated useful life of 15 years. On January 3, 2005, the company completed a renovation of the system at a cost of $33,000 and now expects the system to be more efficient to last 8 years beyond the original estimate. The company uses the straight-line method of depreciation
A. Prepare the journal entry at January 2, 1992 to record the purchase of the heating system.
B. Prepare the journal entry at January 2, 1992 to record the rennovation of the heating system.
C. What is the net book value at December 31, 2004?
D. what is the new depreciation life?
E. How much depreciation must the company recognize at December 31, 2005?
F. Prepare the journal entry at December 31, 2005 to record the depreciation for 2005.
G. Prepare the partial balance sheet at December 31, 2005