Question

Hey, I'm not too sure why this is wrong.. Can you please help me? Thank youu!

Return toc At the beginning of the year, Grillo Industries bought three used machines from Freeman Incorporated. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts. points Cost of the asset Installation costs Renovation costs prior to use Repairs after production began Machine A $9,000 800 600 500 Machine B $38,200 2,100 1,700 600 Machine C $22,000 1,200 2,200 700 By the end of the first year, each machine had been operating 8,000 hours. Required: 1. Compute the cost of each machine. 2. Prepare the journal entry to record depreciation expense at the end of year 1, assuming the following: Machine Estimates Life Residual Value Depreciation Method 4 years $1,000 Straight-line 30,000 hours 4,500 Units-of-production 10 years 1,400 Double-declining-balance * Answer is complete but not entirely correct Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the cost of each machine. Machine A Machine B Machine C Cost of Machine $ 10,900 % $ 42,000 $ 25,400 Required 1 Required 2 >

Answer 1

Repairs after production begun should be expenses into income statement and should not be capitalized.
	Machine A	Machine B	Machine C
Cost of assets	$           9,000	$      38,200	$                  22,000
Installment cost	$              800	$         2,100	$                    1,200
Renovation cost prior to use	$              600	$         1,700	$                    2,200
Original cost	$        10,400	$      42,000	$                  25,400

Method	Straight line		Machine A
Original cost			$                  10,400
Less: Salvage value			$                    1,000
Depreciable Value			$                    9,400
Divided by: Useful life			4
Depreciation expense			$                    2,350
Method	Unit of production		Machine B
Original cost			$                  42,000
Less: Salvage value			$                    4,500
Depreciable Value			$                  37,500
Divided by: useful life in machine hours			30,000
Depreciation per machine hour			$                       1.25
Multiply: machine hours used			8,000
Depreciation expense			$                  10,000
Method	Double Decline		Machine C
Deprecation rate as per Straight line (1/10)			10%
Deprecation rate as per Double Decline method (10%*2)			20%
Depreciation = Beginning book value * 40%
Original cost			$                  25,400
Multiply: Deprecation rate as per Double Decline method			20%
Depreciation expense			$                    5,080
Total depreciation expense
Machine A	$           2,350
Machine B	$        10,000
Machine C	$           5,080
Total depreciation expense	$        17,430

Transaction	General Journal	Debit	Credit
1	Depreciation expense	$        17,430
	Accumulated Depreciation - Machine A		$         2,350
	Accumulated Depreciation - Machine B		$      10,000
	Accumulated Depreciation - Machine C		$         5,080
	To record depreciation expense.