Reference no: EM132617445

Boat Ltd. has a major asset that has just been purchased and has been segregated into the following significant components made up of spare parts and major inspections. Component D consists of a group of insignificant components lumped together with an average cost and useful life.

Component        Quantity             Original Unit Cost              Residual Value              Useful Life

A                          6                      $126,000                       $5,700                     12years

B                          6                         47,000                         0                            3years

C                            1                       8,700                       650                             6years

D                          6                           2,700                        0                              2years

Required:

Problem 1. Assuming straight-line is the appropriate method of depreciation, what is the amount of depreciation in year one? (Round down the intermediate calculations to the nearest whole dollar. Round final answer to nearest whole dollar.)

Problem 2-a. Not available in Connect.

Problem 2-b. The new major spare part has a value of $57,000. Prepare the journal entry that would be recorded when component B is replaced. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round the intermediate calculations to two decimal places. Round down final answers to the nearest whole dollar.)