Question

The December 31, 2017, adjusted trial balance of Maritime Manufacturing showed the following information $ 740,000 360,300 107,600 58,600 Machinery Accumulated depreciation, machinery Office furniture Accumulated depreciation, office furniture2 Remaining useful life four years; estimated residual $90,000 Remaining useful life five years, estimated residual $13,000 Early in 2018, the company made a decision to stop making the items produced by the machinery and buy the items instead As a result, the remaining useful life was decreased to two years and the residual value was increased to a total of $140,000 At the beginning of 2018, it was determined that the estimated life of the office furniture should be reduced by two years and the residual value decreased by $9,000. The company calculates depreciation using the straight-line method to the nearest month Required Prepare the entries to record depreciation on the machinery and office furniture for the year ended December 31, 2018. (If no entry is required for a transactionlevent, select "No journal entry required" in the first account field. Round the final answer to the nearest whole dollars.) View transaction list Journal entry worksheet 2 Record the depreciation on the machinery, for the year ended Dec. 31, 2018 Note: Enter debits before credits Date General Journal Debit Credit Dec. 31, 2018 Record entry Clear entry View general journal

Answer 1

Depreciation under straight-line method=(Cost-residual value)/Useful life

Machinery:

Machiery cost to be depreciated for the remaining two years=(Cost-accumulated depreciation)=740000-360300=$ 379700

Residual value=$ 140000

Depreciation for 2018=(379700-140000)/2=$ 119850

Journal entry to record depreciation:

Date

General journal

Debit

Credit

Dec 31,2018

Depreciation expense

119850

Accumulated depreciation-Machinery

119850

Office furniture:

Office furniture cost to be depreciated for the remaining years=(Cost-accumulated depreciation)=107600-58600=$ 49000

Residual value=13000-9000=$ 4000

Remaining useful life=5-2=3 years

Depreciation for 2018=(49000-4000)/3=$ 15000

Journal entry to record depreciation:

Date

General journal

Debit

Credit

Dec 31,2018

Depreciation expense

15000

Accumulated depreciation-Office furniture

15000