Question

On December 31, 2020, Marin Inc. has a machine with a book value of $1,334,800. The original cost and related accumulated depreciation at this date are as follows. Machine Less: Accumulated depreciation Book value $1,846,000 511,200 $1,334,800 Depreciation is computed at $85,200 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 $610,600 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.) Date Account Titles and Explanation Debit Credit August 31, 2021 (To record current depreciation.) August 31, 2021

Answer 1

Credit Debit $ 56,800 Date Account Titles and Explanation August 31, 2021 Depreciation Expense ($85,200/12*8) Accumulated Depreciation - Machine (To record current depreciation) $ 56,800 August 31, 2021 Cash Accumulated Depreciation - Machine ($511,200+$56,800) Loss on Disposal of Machinery (Bal. fig) Machinery (To record loss of the machine) $ 6,10,600 | $5,68,000 $6,67,400 $ 18,46,000 Credit Date April 1, 2021 Debit $ 21,300 Account Titles and Explanation Depreciation Expense ($85,200*3/12) Accumulated Depreciation - Machine (To record current depreciation) $ 21,300 April 1, 2021 $ 14,76,800 $5,32,500 Cash Accumulated Depreciation - Machine ($511,200+$21,300) Gain on Disposal of Machine (Bal. fig) Machine (To record sale of the machine) $ 1,63,300 $ 18,46,000

Credit Date July 31, 2021 Debit $ 49,700 Account Titles and Explanation Depreciation Expense ($85,200*7/12) Accumulated Depreciation - Machine (To record current depreciation) $ 49,700 July 31, 2021 $ 15,62,000 | $5,60,900 Contribution Expense Accumulated Depreciation - Machine ($511,200+$49,700) Gain on Disposal of Machine (Bal. fig) Machine (To record donation of the machine) $ 2,76,900 $ 18,46,000