Question

On December 31, 2017, Monty Inc. has a machine with a book value of $1,184,400. The original cost and related accumulated depreciation at this date are as follows. Machine $1,638,000 Less: Accumulated depreciation 453,600 Book value $1,184,400 Depreciation is computed at $75,600 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, 2018. An insurance settlement of $541,800 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 en and enter 0 for the amounts.) is required, select "No Entry" for the account titles Account Titles and Explanation Date Debit Credit August 31, 2018 (To record current depreciation.) August 31, 2018 (To record loss of the machine.) On April 1, 2018, Monty sold the machine for $1.310.400 to Dwight Yoakam Company, (Credit account titles are

Answer 1

Answera Account Titles and Explanation Debit Credit Date 8/12) Depreciation Expense ($75,600 Aug. 31, 2018 50,400 Accumulated Depreciation-Machine 50,400 (To record current depreciation) Cash 541,800 Aug. 31, 2018 Accumulated Depreciation-Machine 504,000 Loss on Disposal of Machine 592,200 Machine 1,638,000 (To record loss of the machine) Answerb. Account Titles and Explanation Date Debit Credit Depreciation Expense ($75,600* 3/12) Accumulated Depreciation-Machine Apr. 01, 2018 18,900 18,900 (To record current depreciation) Cash Apr. 01, 2018 1,310,400 Accumulated Depreciation-Machine 472,500 Gain on Disposal of Machine 144,900 Machine 1,638,000 (Torecord sale of the machine)

Answerc Account Titles and Explanation Debit Credit Date Depreciation Expense ($75,600* 7/12) July 31, 2018 44,100 Accumulated Depreciation-Machine 44,100 (To record current depreciation) Contribution Expense July 31, 2018 1,386,000 Accumulated Depreciation-Machine 497,700 Gain on Disposal of Machine 245,700 Machine 1,638,000 (To record donation of the machine)