Question

The following data relate to the Machinery account of Metlock, Inc. at December 31, 2020. Machinery...

The following data relate to the Machinery account of Metlock, Inc. at December 31, 2020.

Machinery

A

B

C

D

Original cost $50,600 $56,100 $88,000 $88,000
Year purchased 2015 2016 2017 2019
Useful life 10 years 15,000 hours 15 years 10 years
Salvage value $3,410 $3,300 $5,500 $5,500
Depreciation method Sum-of-the-years'-digits Activity Straight-line Double-declining balance
Accum. depr through 2020* $34,320 $38,720 $16,500 $17,600


*In the year an asset is purchased, Metlock, Inc. does not record any depreciation expense on the asset.

In the year an asset is retired or traded in, Metlock, Inc. takes a full year’s depreciation on the asset.

The following transactions occurred during 2021.

(a) On May 5, Machine A was sold for $14,300 cash. The company’s bookkeeper recorded this retirement in the following manner in the cash receipts journal.

Cash

14,300

    Machinery (Machine A)

14,300

(b) On December 31, it was determined that Machine B had been used 2,350 hours during 2021.
(c) On December 31, before computing depreciation expense on Machine C, the management of Metlock, Inc. decided the useful life remaining from January 1, 2021, was 10 years.
(d) On December 31, it was discovered that a machine purchased in 2020 had been expensed completely in that year. This machine cost $30,800 and has a useful life of 10 years and no salvage value. Management has decided to use the double-declining-balance method for this machine, which can be referred to as “Machine E.”

I ONLY NEED PART A AND B PLEASE. :)

0 0
Add a comment Improve this question Transcribed image text
Answer #1

a) Accumulated Depreciation-Machinery = (50,600 - 3,410) x 5/55 = 4,290

Machinery = 50,600 - 14,300 = 36,300

Debit Credit
Depreciation Expense    4,290.00
Accumulated Depreciation    4,290.00
Accumulated Depreciation    38,610.00
Machinery    36,300.00
Gain on Disposal      2,310.00

b)

Accumulated Depreciation-Machinery = (56,100 - 3,300) x 2,350/15,000 = 8,272

Debit Credit
Depreciation Expense      8,272.00
Accumulated Depreciation      8,272.00
Add a comment
Know the answer?
Add Answer to:
The following data relate to the Machinery account of Metlock, Inc. at December 31, 2020. Machinery...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • The following data relate to the Machinery account of Tamarisk, Inc. at December 31, 2020. Machinery D Original cost Y...

    The following data relate to the Machinery account of Tamarisk, Inc. at December 31, 2020. Machinery D Original cost Year purchased Useful life Salvage value $53,360 2015 10 years $3,596 Sum-of-the- years -digits $36,192 $59,160 2016 15,000 hours $3,480 Activity $92,800 2017 15 years $5,800 Straight- $92,800 2019 10 years $5,800 line Depreciation method Accum. depr through 2020* Double-declining balance $18,560 $40,832 $17,400 $18 56 *In the year an asset is purchased, Tamarisk, Inc. does not record any depreciation expense...

  • Teal Tool Company's December 31 year-end financial statements contained the following errors. December 31, 2020 December...

    Teal Tool Company's December 31 year-end financial statements contained the following errors. December 31, 2020 December 31, 2021 $10,100 understated $7,700 overstated Ending inventory Depreciation expense $2,400 understated An insurance premium of $68,100 was prepaid in 2020 covering the years 2020, 2021, and 2022. The entire amount was charged to expense in 2020. In addition, on December 31, 2021, fully depreciated machinery was sold for $13,900 cash, but the entry was not recorded until 2022. There were no other errors...

  • On January 1, 2019, Betty DeRose, Inc. purchased a piece of machinery for $320,000. The machine...

    On January 1, 2019, Betty DeRose, Inc. purchased a piece of machinery for $320,000. The machine had an estimated useful life of 8 years and a salvage value of $5,000. Assume Betty DeRose depreciates its assets using the double declining balance method of depreciation. Calculate the amount of accumulated depreciation related to the machine that would appear in Betty's December 31, 2022 balance sheet.

  • Exercise 11-17 Presented below is information related to equipment owned by Metlock Company at December 31,...

    Exercise 11-17 Presented below is information related to equipment owned by Metlock Company at December 31, 2020. Cost Accumulated depreciation to date Expected future net cash flows Fair value $9,900,000 1,100,000 7,700,000 5,280,000 Metlock intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $22,000. As of December 31, 2020, the equipment has a remaining useful life of 5 years. Prepare the journal entry (if any) to record the impairment...

  • Metlock Company uses special strapping equipment in its packaging business. The equipment was purchased in January...

    Metlock Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2019 for $11,000,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2020, new technology was introduced that would accelerate the obsolescence of Metlock’s equipment. Metlock’s controller estimates that expected future net cash flows on the equipment will be $6,930,000 and that the fair value of the equipment is $6,160,000. Metlock intends to continue using the equipment,...

  • 1, ABC Inc. has a machine that, as of December 31, 2018, has the following information:...

    1, ABC Inc. has a machine that, as of December 31, 2018, has the following information: Cost: $10,800; Residual value: $1,800; Age: 2 years; Accumulated depreciation $6,000. Which of the following statements is correct? a. The useful life of the machine is 6 years. The annual depreciation is $1,500. b. The useful life of the machine is 3 years. The annual depreciation is $3,000. c. The useful life of the machine is 6 years. The annual depreciation is $3,000. d....

  • PART B) Compute 2020 depreciation expense using the double-declining-balance method, assuming the machinery was purchased on...

    PART B) Compute 2020 depreciation expense using the double-declining-balance method, assuming the machinery was purchased on October 1, 2020. Wildhorse Company purchased machinery on January 1, 2020, for $94,400. The machinery is estimated to have a salvage value of $9,440 after a useful life of 8 years. (a) Compute 2020 depreciation expense using the double-declining-balance method. Depreciation expense $

  • At December 31, 2020, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances...

    At December 31, 2020, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances as follows: Category Plant Asset Accumulated Depreciation and Amortization Land $ 185,000 $ — Buildings 2,000,000 338,900 Equipment 1,625,000 327,500 Automobiles and trucks 182,000 110,325 Leasehold improvements 236,000 118,000 Land improvements — — Depreciation methods and useful lives: Buildings—150% declining balance; 25 years. Equipment—Straight line; 10 years. Automobiles and trucks—200% declining balance; 5 years, all acquired after 2017. Leasehold improvements—Straight line. Land improvements—Straight line....

  • On January 1, 2013, Powell Company purchased a building and machinery that have the following useful...

    On January 1, 2013, Powell Company purchased a building and machinery that have the following useful lives, salvage value, and costs. Building, 25-year estimated useful life, $9,000,000 cost, $900,000 salvage value Machinery, 10-year estimated useful life, $1,200,000 cost, no salvage value The building has been depreciated under the straight-line method through 2017. In 2018, the company decided to switch to the double-declining balance method of depreciation for the building. Powell also decided to change the total useful life of the...

  • At December 31, 2020, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances...

    At December 31, 2020, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances as follows: Category Plant Asset Accumulated Depreciation and Amortization Land $ 185,000 $ — Buildings 2,000,000 338,900 Equipment 1,625,000 327,500 Automobiles and trucks 182,000 110,325 Leasehold improvements 236,000 118,000 Land improvements — — Depreciation methods and useful lives: Buildings—150% declining balance; 25 years. Equipment—Straight line; 10 years. Automobiles and trucks—200% declining balance; 5 years, all acquired after 2017. Leasehold improvements—Straight line. Land improvements—Straight line....

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT