Question

Problem 9-18A Partial year's depreciation; alternative methods; exchange/disposal of PPE LO2, 3, 6 CHECK FIGURES: a. Machine 1550 - $6,075; Machine 1795 - $22.646: Machine BT-311 = $77,810 Zephyr Minerals completed the following transactions involving machinery. Machine No. 1550 was purchased for cash on April 1. 2020, at an installed cost of $52.900. Its useful life was estimated to be six years with a $4.300 trade in value. Straight-line depreciation was recorded for the machine at the ends of 2020 2021, and 2022. On March 29, 2023. it was traded for Machine No. 1795, with an installed cash price of $62,000. A trade in allowance of $30.210 was received for Machine No. 1550, and the balance was paid in cash. The fair values of Machine No. 1550 and Machine No. 1795 could not be determined. Machine No. 1795's life was predicted to be four years with a trade-in value of $8.200. Double-declining-balance depreciation on this machine was recorded each December 31. On October 2. 2024. it was traded for Machine No. BT-311, which had an installed cash price of $537.000, the machine's fair value. A trade in allowance of $20,000 was received for Machine No. 1795. and the balance was paid in cash. It was estimated that Machine No. BT-311 would produce 200,000 units of product during its five-year useful life, after which it would have a $35.000 trade-in value. Units of production depreciation was recorded for the machine for 2024. a period in which it produced 31.000 units of product. Between January 1. 2025, and August 21, 2027, the machine produced 108.000 more units. On August 21, 2027, it was sold for $81.200 Required Round calculations to the nearest dollar and prepare journal entries to record: a. The depreciation expense recorded to the nearest whole month on the first December 31 of each machine's life b. The purchase/exchange/disposal of each machine. Problem 9-19A Intangible assets L07 CHECK FIGURE: b. $24,000 On October 1, 2020, Kingsway Broadcasting purchased for $288,000 the copyright to publish the music composed by a local Celtic group Kingsway expects the music to be sold over the next three years. The company uses the straight line method to amortize intangibles. Page 679 Required Prepare entries to record: a. The purchase of the copyright 5. The amortization for the year ended December 31, 2020, calculated to the nearest whole month

Answer 1

Dear Student,

As per the HOMEWORKLIB POLICY, only the first question should be answered. Kindly take note of it. Each new question should be posted separately.

Part A

Date	Account titles and explanation	Debit	Credit
Dec. 31, 2020	Depreciation expense – machine 1550	6075
	Accumulated depreciation – machine 1550		6075
	(to record depreciation)
Dec. 31, 2023	Depreciation expense – machine 1795	22646
	Accumulated depreciation – machine 1795		22646
	(to record depreciation)
Dec. 31, 2024	Depreciation expense – machine BT-311	77810
	Accumulated depreciation – machine BT-311		77810
	(to record depreciation)

Part B

Date	Account titles and explanation	Debit	Credit
Apr. 31, 2020	machine 1550	52900
	Cash		52900
	(to record purchase of Machine 1550)
Mar. 29, 2023	Machine 1795	60390
	Accumulated depreciation - machine 1550	24300
	machine 1550		52900
	Cash		31790
	(To record exchange of Machine 1550)
Oct. 2, 2024	Machine BT-311	537000
	Accumulated depreciation - machine 1795	36800
	Loss on Disposal (balancing figure)	35000
	machine 1795		60390
	Cash (742000-10000)		517000
	(To record exchange of Machine 1795)
Aug. 21, 2027	Cash	81200
	Accumulated depreciation – machine BT-311	348890
	Loss on Disposal (balancing figure)	106910
	Machine BT-311		537000
	(to record sale of Machine BT-311)

Depreciation expense Dec. 31, 2017 = ((52900-4300)/6*9/12)= 6075

2020	6075
2021 ((52900-4300)/6)	8100
2022	8100
2023 ((52900-4300)/6)*3/12	2025
Accumulated depreciation	24300

Book value = 52900-24300 = 28600

Cash paid = 62000-30210 = 31790

Book value + cash paid = 28600+31790 = 60390

Depreciation Dec. 31, 2020 = 60390*2/4*9/12 =22646

2024 (60390-22646)*2/4*9/12	14154
2023	22646
Accumulated depreciation	36800

Depreciation Dec. 2024 = (537000-35000)/200000 = $2.51 per unit *31000 = $77810

2025-aug. 2027 (2.51*108000)	271080
2024	77810
Accumulated depreciation	348890