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In Year 3, Cougar Co. purchased the equipment indicated in the situations below. The company has a December 31 year end and records depreciation using the straight-line method.
To prepare each required journal entry:
Click on a cell in the Account Name column and select the appropriate account. An account may be used once or not at all for a journal entry.
Enter the corresponding debit or credit amount in the associated column.
All amounts will be automatically rounded to the nearest dollar.
Not all rows in the table might be needed to complete each journal entry.
If no journal entry is needed, check the "No Entry Required" box at the top of the table as your response.Cougar purchased a tractor on March 1, Year 3, for $240,000, and the estimated useful life was 5 years. Cougar recorded $48,000 for depreciation expense in Year 3. Record the entry upon discovery of the error in Year 4. Assume that Cougar records depreciation expense monthly.
No Entry Required
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1 Account Name
Debit
Credit
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The journal entry for depreciation expense is to debit the Depreciation Expense account and credit the Accumulated Depreciation account.

The Depreciation Expense appears on the income statement while the Accumulated Depreciation appears in the balance sheet as a contra account of the long-term asset.

Adjustment Analysis:

1) Additional Engine:

Equipment Addition $65,000 Cash $65,000

Equipment $120,000 Accumulated Depreciation $20,000

Remaining useful life = 10 years (12 -2)

Additional useful life following the equipment addition = 5

New useful life of Equipment = 15 years (10 + 5)

Annual depreciation = $11,000 ($165,000/15)

Depreciation Expense $11,000 Accumulated Depreciation $11,000

2) Tractor:

Year 4 Depreciation Expense $40,000 ($48,000 - $8,000) Accumulated Depreciation $40,000 ($48,000 - $8,000) $8,000 is to reverse the overstatement in Year 3.

3) Snowmobile:

Cost of Snowmobile = $19,000

Salvage value = $1,000

Purchase date = October 1, Year 3

Depreciable amount = $18,000

Annual depreciation = $6,000 ($18,000/3)

Estimated useful life = 3 years

Year 3 Depreciation Expense = $1,500 ($6,000 x 3/12)

Year 4 Depreciation Expense = $6,000

Year 4 Depreciation Expense to June 30 = $3,000

June 30, Year 4: Depreciation Expense $4,500 Accumulated Depreciation $4,500

Learn more about journalizing depreciation at https://brainly.com/question/29774318

Question Completion:

1) On January 1, Year 3, Cougar added an engine to a backhoe at a cost of $65,000, which extended the estimated useful life of the asset by 5 years. The original equipment, purchased January 1, Year 1, cost $120,000 and had an estimated useful life of 12 years. Record the entry needed on December 31, Year 3. Assume that Cougar records depreciation expense annually.

2) Cougar purchased a tractor on March 1, Year 3, for $240,000, and the estimated useful life was 5 years. Cougar recorded $48,000 for depreciation expense in Year 3. Record the entry upon discovery of the error in Year 4. Assume that Cougar records depreciation expense monthly.

3) Cougar purchased a snowmobile on October 1, Year 3, for $19,000, with a $1,000 salvage value, and the estimated useful life was 3 years. Due to an oversight, the company failed to record depreciation expense in Years 3 and 4. Record the entry needed on June 30, Year 4, when the oversight was discovered. Assume that Cougar records depreciation expense monthly.