Use the following information to answer question 3 and 4. an equipment to manufa

Question

Use the following information to answer question 3 and 4. an equipment to manufacture the new Model X that is comprised of five components on January 1, 2017. Assume that Tesla uses straight-line depreciation. ComponentCos Estimated Residual Estimated Life Part-A$40,500 $5,500 $33,600$4,8oo $3,600 $1,500 $2,500 10 Part-B Part-C Part-D Part-E 9 $36,000 $19,000 $23.500 The adjusting entry at hod be A. $17,900 B. $134.700 C. $16,750 D. $152,600 Component B was used for 6 years and it was replaced by a new component for cash of $40,000. Please prepare the entry to record the replacement process A. Equipment Accumulated Depreciation Loss on Disposal of Equipment Equipment (used) 40,000 22,398 11,202 33,600

Explanation / Answer

Answer: Option C. $16750

Answer: Option D.

*Accumulated depreciation = ($33600 - $4800) x 6/9 = $19200

Component Cost $ Estimated Residual $ Depreciable Cost $ Estimated Life Annual Depreciation $ Part-A 40500 5500 35000 10 3500 Part-B 33600 4800 28800 9 3200 Part-C 36000 3600 32400 8 4050 Part-D 19000 1500 17500 7 2500 Part-E 23500 2500 21000 6 3500 Total $ 16750

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