Xeno Co Incurred the Following Transactions Concerning Its Machinery

question 116

Essay

Xeno Co. incurred the following transactions concerning its machinery:
$\begin{array}{|l|l|}\hline\text { Jan 1,2021 } & \begin{array}{l}\text { Purchased a machine for } \$ 60,000 \text { cash, and } \\\text { also paid } \$ 3,000 \text { cash to have it installed. } \\\text { Estimated useful life is } 10 \text { years and } \\\text { residual value is } \$ 3,000 \text {. Straight line } \\\text { depreciation is used. }\end{array} \\\hline \text { Jan 1,2022 } & \begin{array}{l}\text { The machine' } \text { useful life was changed } \\\text { from } 10 \text { years to } 9 .\end{array} \\\hline \text { Jan } 8,2023 & \begin{array}{l}\text { Paid } \$ 3,800 \text { to replace a motor in the } \\\text { machine. This was considered a major } \\\text { overhaul. }\end{array}\\\hline\end{array}$

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Definitions:

Ledger

A compilation or record of financial transactions kept in a book or collection of accounts.

Financial Statements

Formal records of the financial activities and position of a business, individual, or other entity, including the balance sheet, income statement, and cash flow statement.

Chart of Accounts

A systematic listing of all accounts used in the accounting system of a company, categorizing all financial transactions.

Net Income

Represents the total earnings of a company after all expenses and taxes have been deducted from revenue.