On October 1, 2022, Sandhill Manufacturing Company purchased a piece of high-tech equipment for $90,100 cash. Sandhill estimated the equipment would have a 7-year useful life and a residual value of $8,900. The company uses straight-line depreciation and has a September 30 fiscal year end.

On October 1, 2024, Sandhill paid $15,200 cash to upgrade the equipment. It is expected that the upgrade will significantly reduce the operating costs of the equipment. Sandhill also reviewed the equipment's expected useful life and estimated that, due to changing technology, the equipment's total expected useful life will be 6 years and its residual value will be $4,900.

a

Your answer is correct,

Calculate the annual depreciation expense for the first two years of the equipment's life.

Annual depreciation expense

11600

per year (b)

Your answer is correct.

Calculate the carrying amount of the equipment at September 30, 2024.

Carrying amount

$

66900. ( c Record the expenditure to upgrade the equipment on October 1, 2024. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List debit entry before credit entry.)

Date Account Titles

Oct. 1

Equipment

Debit

Credit

15200

Cash.

15200 Record the annual depreciation of the equipment on September 30, 2025. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List debit entry before credit entry.)

Date Account Titles

Sept.

30

Depreciation Expense

い