smandylee123
20.12.2019 •
Business
Problem 10-3a on january 1, 2017, evers company purchased the following two machines for use in its production process.
machine a: the cash price of this machine was $37,500. related expenditures included: sales tax $3,600, shipping costs $100, insurance during shipping $50, installation and testing costs $120, and $150 of oil and lubricants to be used with the machinery during its first year of operations. evers estimates that the useful life of the machine is 5 years with a $5,950 salvage value remaining at the end of that time period. assume that the straight-line method of depreciation is used.
machine b: the recorded cost of this machine was $180,000. evers estimates that the useful life of the machine is 4 years with a $9,800 salvage value remaining at the end of that time period.
prepare the following for machine a. (round answers to 0 decimal places, e.g. 5,125. 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 0 for the amounts.)
(1) the journal entry to record its purchase on january 1, 2017.
(2) the journal entry to record annual depreciation at december 31, 2017.
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Ответ:
Please see the solution below:
Explanation:
Machine A:
(i) Total Machine A Cost
Purchase Price = $37,500
Sales Tax = $3,600
Shipping Cost = $100
Insurance during shipping = $50
Installation and Testing Cost = $120
Total Machine A cost = $41,370
(ii) Depreciation
Recorded Cost = $41,370
Less: Salvage Value = $5,950
Useful Life = 5 years
Straight Line Method is used to find depreciation per yer will be:
Depreciation = $7,084
(1) The Journal Entry to record purchase of equipment (Machine A)
January 1, 2017
Dr. Equipment $41,370
Cr. Cash $41,370
(2) The Journal Entry to record annual depreciation (Machine A)
December 3, 2017
Dr. Depreciation $7,084
Cr. Accumulated Depreciation - Equipment $7,084
Ответ:
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