Homework Answers
(a)
| Machine 1 | Machine 2 | |||
| Period | Year | Depreciation | Year | Depreciation |
| For 6 month | 2016 | $6,000 | ||
| Full Year | 2017 | $12,000 | ||
| Full Year | 2018 | $12,000 | ||
| Full Year | 2019 | $12,000 | 2019 | $10,000 |
| For 6 month | 2020 | $6,000 | 2020 | $16,000 |
| $48,000 | $26,000 | |||
(b)
| Journal Entry | |||
| Accounts & Explanation | Debit | Credit | |
| 07/01/2020 | Depreciation | $6,000 | |
| Accumulated Depreciation | $6,000 | ||
| (To Record depreciation for 2020 for Machine 1) | |||
| Cash | $15,000 | ||
| Accumulated Depreciation | $48,000 | ||
| Loss on sale of Machine 1 | $3,000 | ||
| Machine 1 | $66,000 | ||
| (To record Sale of Machine 1) | |||
| 12/31/2020 | Depreciation | $16,000 | |
| Accumulated Depreciation | $16,000 | ||
| (To Record depreciation for 2020) | |||
| Cash | $30,000 | ||
| Accumulated Depreciation | $26,000 | ||
| Machine 2 | $50,000 | ||
| Profit on sale of Machine 2 | $6,000 | ||
| (To record Sale of Machine 2) | |||
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machine 1: cost 76,000 salvage value 6,000 useful life 10 years purchased 7/1/16 machine 2: cost...
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cost 76,000
salvage value 6,000
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machine 1:
cost 76,000
salvage value 6,000
useful life 10 years
purchased 7/1/16
machine 2:
cost 80,000
salvage value 10,000
useful life 8 years
purchased 1/1/13
machine 3:
cost 78,000
salvage value 6,000
useful life 6 years = 24,000 hours
purchased 1/1/18
Problem: In recent years, Hrubeck Company purchased three machines. Because of heavy turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods were selected. Information concerning...
On January 1, 2020, Riverbed Company purchased the following two
machines for use in its production process.
Machine A:
The cash price of this machine was $48,500. Related
expenditures included: sales tax $1,700, shipping costs $200,
insurance during shipping $50, installation and testing costs $120,
and $200 of oil and lubricants to be used with the machinery during
its first year of operations. Riverbed estimates that the useful
life of the machine is 5 years with a $4,750 salvage value...
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