On December 31 2016 Vail Company owned the following

assets Vail #2515

On December 31, 2016, Vail Company owned the following assets:Vail computes depreciation
and amortization expense to the nearest whole year. During 2017, Vail engaged in the following
transactions:Jan. 3 Extended the building at a cost of $ 30,000. The extension provided an
addition to the service potential of the building.Mar. 7 Sold a piece of office machinery that had
originally cost $ 4,000 and that had accumulated depreciation of $ 1,952 on December 31,
2016. The machine was sold for $ 3,000. May 17 Purchased office fixtures and office machinery
for $ 9,200. The supplier reduced the price because of the joint purchase. If purchased
separately, the office fixtures would have cost $ 6,000 and the office machinery $ 4,000.
Delivery costs paid by Vail were $ 200. The machinery was accidentally damaged during
installation and cost $ 230 to repair. The office fixtures have an estimated life of 5 years and a
residual value of $ 250. The office machinery has an estimated life of 10 years and a residual
value of $ 500.Aug. 10 Exchanged the president’s desk ( classified as office fixtures) for a
larger desk belonging to a friend of the president. The desk had cost $ 600 and had
accumulated depreciation on December 31, 2016, of $ 400 and an estimated residual value of $
100. The new desk had a value of $ 900 and $ 700 cash was paid.Oct. 20 Serviced and
adjusted the office machinery at a cost of $ 125.Required:1. Check the accuracy of the
accumulated depreciation balances at December 31, 2016. Round to the nearest whole dollar in
all requirements.2. Prepare journal entries to record the preceding events in 2017, as well as
the year- end recording of depreciation expense.3. Prepare an Accumulated Depreciation
account for each category of assets, enter the beginning balance, post the journal entries from
Requirement 2, and compute the ending balance.View Solution:
On December 31 2016 Vail Company owned the following assets Vail

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