Question

View Policies Current Attempt in Progress On December 31, 2020. Teal Inc. has a machine with a book value of $1,090,400. The original cost and related accumulated depreciation at this date are as follows. Machine Less: Accumulated depreciation Book value $1.500.000 417,600 $1,090,400 Depreciation is computed at $49.600 per year on a straight-line basis. Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record the transaction. Make sure that depreciation entries are made to update the book value of the machine prior to its disposal. A fire completely destroys the machine on August 31, 2021. An insurance settlement of $499,800 was received for this casualty. Assume the settlement was received immediately. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit 21 To record current depreciation) 21 (To record loss of the machine.) e Textbook and Media List of Accounts On April 1, 2021, Teal sold the machine for $1,204,400 to Yoakam Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit 21 (To record current depreciation) 21 (To record sale of the machine e Textbook and Media List of Accounts On July 31, 2021, the company donated this machine to the Mountain King City Council. The fair value of the machine at the time of the donation was estimated to be $1.274,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account tities and enter for the amounts) Account Titles and Explanation Debit Credit 21 (To record current depreciation) 21 To record donation of the machine.) e Textbook and Media List of Accounts

Answer 1

1) Debit $46,400 Credit $69,600/12*8 $46,400 Date Account Titles and Explanation Aug 31, 2021 Depreciation expense Accumulated Depreciation (To record current depreciation) Aug 31, 2021 Bank Accumulated Depreciation Loss on damage of machine Machine (To record the loss of machine) $498,800 $464,000 $545,200 $417,600+ $46400 $1,508,000 2) Debit $17,400 Credit $69,600/12*3 $17,400 Date Account Titles and Explanation April 30, 2021 Depreciation expense Accumulated Depreciation (To record current depreciation) April 30, 2021 Bank Accumulated Depreciation Machine Gain on sale of machine (To record the sale of machine) $1,206,400 $435,000 $417,600+ $17,400 $1,508,000 $133,400 2) Debit $40,600 Credit $69,600/12*7 $40,600 Date Account Titles and Explanation July 31, 2021 Depreciation expense Accumulated Depreciation (To record current depreciation) July 31, 2021 Donation Accumulated Depreciation Machine Gain on donation of machine (To record the donation of machine) $1,276,000 $458,200 $417,600+ $40,600 $1,508,000 $226,200