Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $80,600. The machine's useful life is estimated at 10 years, or 388,000 units of product, with a $3,000 salvage value. During its second year, the machine produces 32,800 units of product.
Exercise 8-5 Units-of-production depreciation LO P1
Determine the machine’s second-year depreciation using the
units-of-production method.
options for the first
box of the numerator
Options for the first box of Denominator
Rodriguez Corporation issues 17,000 shares of its common stock
for $302,700 cash on February 20. Prepare journal entries to record
this event under each of the following separate situations.
2) Record the issue of 17,000
shares of no-par, no-stated value common stock for $302,700
cash.
3) Record the issue of 17,000 shares of $8 stated value common stock for $302,700 cash.
Options for the General Journal
1) Ans:-
Units-of-production Depreciation | |||||
Choose Numerator: | / | Choose Denominator: | = | Annual Depreciation Expense | |
Cost minus salvage | / | Total units of production | = | Depreciation expense per unit | |
$78600 (80600-3000) |
/ | 388,000 | = | $0.20 | |
Year | Annual Production (units) | Depreciation Expense | |||
2 | 32,800 | $6,560(32,800 X 0.20) |
2 Ans:-
Transaction | General Journal | Debit $ | Credit $ |
1 | Cash | 302700 | |
Common stock, $16 par value (17000*16) | 272000 | ||
capital Paid-in in excess of par value ($302700-$272000) | 30700 | ||
(Par value stock is that stock which has been assigned a value per share) | |||
2 | Cash | 302700 | |
Common stock | 302700 | ||
(Stocks which are assigned no par value stock are termed as no par value stocks) | |||
3 | Cash | 302700 | |
Common stock ( 17000 * $8 ) | 136000 | ||
capital Paid in excess of stated value(302700 - 136000) | 166700 | ||
(When a stated value to the no par value stock is assigned it is called stated value stock and it represents the legal capital) |
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