Question

Required information [The following information applies to the questions displayed below.] Onslow Co. purchased a used machine for $288,000 cash on January 2. On January 3, Onslow paid $8,000 to wire electricity to the machine and an additional $1,600 to secure it in place. The machine will be used for six years and have a $34,560 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of. 2. Prepare journal entries to record depreciation of the machine at December 31.

Answer 1

Answer t Straight_line_Method of Depreciation - Depreciation_is_40_expegue which is created from the wear and tear of awel in business. There are many methods of cakeulating depreciation. viz. sraight line, reducing balance, sum of years digit, ele are the methods. i n the Sheight line Method, there is 40_ @quel gmurat of Jepreciation experie_each year. It is calcelleted by_tola) cost of asset minus salvage value divided by useful life of asset. It is calculate bit: Straight line . Tola) Gjt of Asset - Sqluage Vylue Depreciation Method Useful life of Asset In the question, it is given that Total cost of Machine = $_(28 8000 + 8000 +1600) - $ 297600 Useful life of machine - 6 years Salvage Value $34560 Method of pepreciation straight line Depreciation Depresiytion Expense_under Straight line Method: : $(297600 - 34560) 6 years :: $ 263040 6 years $ 43840 per yeny

2. depreciation of machine at Journal Entry to record December 31 Onslow company Journal Entry Date credit ($) 43840 particulars Debit $2 Decal | Depreciation Expense Alc D r. 43840 - To Accumulabel Depreciation Ale (Being to record depreciation expense en machinay under straight line method 43840 | 43340. 6 Total cost of machine At the time aquisition all the costs incenned for setting a machine is added to the cost of machine Therefore, In the given question costs like wires electricity. Securing Space Expenses are added to the cost of machine