Question

How do I solve this? (please include how calculations were made and account titles, and the numbers that go with those accounts) I am very confused.

Exercise 10-24

On December 31, 2014, Travis Tritt Inc. has a machine with a book value of $1,406,240. The original cost and related accumulated depreciation at this date are as follows.

Machine
$1,944,800
Less: Accumulated depreciation
538,560
Book value
$1,406,240

Depreciation is computed at $89,760 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, 2015. An insurance settlement of $643,280 was received for this casualty. Assume the settlement was received immediately.
B. On April 1, 2015, Tritt sold the machine for $1,555,840 to Dwight Yoakam Company.

C.On July 31, 2015, 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 $1,645,600.

I do not

Answer 1

A. fire completely destroys the machine on August 31, 2015. An insurance settlement of $643,280 was received for this casualty. Assume the settlement was received immediately.

Depreciation Expenses till August 31 = 89760*8/12 = $ 59,840

Date	Account Title & Explaination	Debit	Credit
August 31, 2015	Depreciation Expenses	59840
	Accumulated Depreciation		59840

Accumulated Depreciation after this entry = 538560 + 59840 = $ 598400

Date	Account Title & Explaination	Debit	Credit
August 31, 2015	Accumulated Depreciation	598400
	Cash	643280
	Loss on destroy due to fire	703120
	machine		1944800

B. On April 1, 2015, Tritt sold the machine for $1,555,840 to Dwight Yoakam Company.

Depreciation Expenses till April 1 = 89760*3/12 = $ 22440

Date	Account Title & Explaination	Debit	Credit
April 1, 2015	Depreciation Expenses	22440
	Accumulated Depreciation		22440

Accumulated Depreciation after this entry = 538560 + 22440 = $ 561000

Date	Account Title & Explaination	Debit	Credit
April 1, 2015	Accumulated Depreciation	561000
	Cash	1555840
	Gain on Sale of Machine		172040
	machine		1944800

C.On July 31, 2015, 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 $1,645,600.

Depreciation Expenses till   July 31, 2015 = 89760*7/12 = $ 52360

Date	Account Title & Explaination	Debit	Credit
July 31, 2015	Depreciation Expenses	52360
	Accumulated Depreciation		52360

Accumulated Depreciation after this entry = 538560 + 52360 = $ 590920

Date	Account Title & Explaination	Debit	Credit
July 31, 2015	Accumulated Depreciation	590920
	Donation	1353880
	Machine		1944800