Question

er 10 Homework Required information The following information applies to the questions displayed below.) Onslow Co. purchases a used machine for $178,000 cash on January 2 and readies it for use the next day at a $2,840 cost. On January 3, it is installed on a required operating platform costing $1,160, and it is further readied for operations. The company predicts the machine will be used for six years and have a $14,000 salvage value. Depreciation is to be charged on a straight-line basis. 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 View transaction list Journal entry worksheet nces Record the year of disposal year-end adjusting entry for the depreciation expense of the used machine Note: Enter debits before credits General Journal Credit Dec 31 Record entry Clear entry View cameral journal < Prev o r Next >

Answer 1

$178,000 Cost of Machine Add: Cost incurred on Jan 2 Add: Operating Platform Cost Total cost of Machine $2,840 $1,160 $182,000 Straight Line Depreciation (Cost Salvage Value)/Useful life Straight Line Depreciation ($182,000 - $14,000)/6 Straight Line Depreciation $28,000 Depreciation Schedule Accumualted Opening WDV Depreciation Closing WDV Year Depreciation $182,000 $154,000 $126,000 $98,000 $70,000 $42,000 0 $182,000 $154,000 $126,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $54,000 $84,000 1 2 3 $98,000 $112,000 $140,000 4 $70,000 5 Account Title Depreciation Expense Accumulated Depreciation Machinery (To record depreciation expense in the year of disposal) Accumulated Depreciation Machinery Loss on Disposal of machinery Machinery (To record loss on disposal pf machinery) Date Debit Credit $28,000 Dec 31 $28,000 $140,000 Dec 31 $42000 $182,000