Question

The following transactions occurred during 2020. Assume that depreciation of 10% per year is charged on all machinery and 5% per year on buildings, on a straight-line basis, with no estimated salvage value. Depreciation is charged for a full year on all fixed assets acquired during the year, and no depreciation is charged on fixed assets disposed of during the year. 30 A building that cost $132,000 in 2003 is torn down to make room for a new building. Jan. The wrecking contractor was paid $5,100 and was permitted to keep all materials salvaged. 10 Machinery that was purchased in 2013 for $16,000 is sold for $2,900 cash, f.o.b. Mar purchaser's plant. Freight of $300 is paid on the sale of this machinery. 20 A gear breaks on a machine that cost $9,000 in 2012. The gear is replaced at a cost of Mar $2,000. The replacement does not extend the useful life of the machine but does make the machine more efficient. A special base installed for a machine in 2014 when the machine was purchased has to May be replaced at a cost of $5,500 because of defective workmanship on the original base. The cost of the machinery was $14,200 in 2014. The cost of the base was $3,500, and this amount was charged to the Machinery account in 2014. 23 One of the buildings is repainted at a cost of $6,900. It had not been painted since it was June constructed in 2016. Instructions Prepare general journal entries for the transactions. (Round to the nearest dollar.) 18

Answer 1

criven an formation depreciation 10% charged on all machinaries 5% per year on buildings Date Description Account Debit credit 30 jan accumulated depreciation building 1,12, 200 lou on dieporal-buiding 24,900 to to Buildings cash 1,32000 $ 100 10march Accumulated depreciation. - maculrary 1,200 calls cou a dirporal 2,600 2,200 machiary 16000 20 march machine ATC 2000 2000 to couh 18 may 5500 machinary accumulated dep on marchinary Z100 lou on diupo dal 1400 to cart to machanary 5500 3500

pate Account Debit coredet 23 june Building maintanauke aud she paї я е ролле 6900 to call 6,900 Analepsie 30 june * accumulated depreciation =1, 32poo x 5% = 6,600 6,600 X 17 = 1, 12,200 an the question given that fixed asset acquired during the year ancluded, and no depreciation charged diuposed year that means foran 2013 to 2020 there are 17 years * this wrecking contractor paid for $5,100. also included an lors on disposal (1,32000 – 1,12,200)+5,100 = 24,900 10 march here accumulated depreciation = 16000 x 10%87 = 1,200 freight expenses excluded from Sale value = 2,900 - 300 = 2,600

20 march gear in replaced at coct 20000 18 may accumulated depreciation = 35000x 2100 lou on deiposal= 3,500-2100 = 1,400