Khalid Co. sold two machines in 2015. The following information pertains to the two machines: Purchase Useful Salvage Depreciation Sales Machine Value Cost Date Life Date Sold 5 yrs. Method Price $6,000 #1 $66,000 7/1/11 Straight- line 7/1/15 $15,000 #2 $50,000 7/1/14 5 yrs. $5,000 Double- declining- 12/31/15 $30,000 balance Declining balance rate for depreciation method double declining balance is = 0.4 Required a. Compute the depreciation on each machine (machine 1 and 2) to the date of disposal b. Calculate the book value at the date of sale and gain (loss) c. Refer to machine #1, prepare the journal entries in 2015 to record 2015 depreciation and the sale for machine #1

Khalid Co. sold two machines in 2015. The following information pertains to the two machines: Purchase Useful Salvage Depreciation Sales Machine Value Cost Date Life Date Sold 5 yrs. Method Price $6,000 #1 $66,000 7/1/11 Straight- line 7/1/15 $15,000 #2 $50,000 7/1/14 5 yrs. $5,000 Double- declining- 12/31/15 $30,000 balance Declining balance rate for depreciation method double declining balance is = 0.4 Required a. Compute the depreciation on each machine (machine 1 and 2) to the date of disposal b. Calculate the book value at the date of sale and gain (loss) c. Refer to machine #1, prepare the journal entries in 2015 to record 2015 depreciation and the sale for machine #1

Century 21 Accounting General Journal

11th Edition

ISBN:9781337680059

Author:Gilbertson

Publisher:Gilbertson

Chapter19: Accounting For Plant Assets, Depreciation, And Intangible Assets

Section: Chapter Questions

Problem 1AFE

See similar textbooks

Similar questions

Working Backward: Depreciation Polk Corp. purchased new store fixtures for $55,000 on January 31, 2014. Polk depreciates assets using the straight-line method and estimated a salvage value for the machine of $5,000. On its December 31, 2016, balance sheet, Polk reported the following: Required What is the yearly amount of depreciation expense for the store fixtures? What is the estimated useful life in years for the store fixtures? Explain your answer.
Matile Co. purchased machinery that was installed and ready for use on January 3, 2012, at a total cost of $115,000. Salvage value was estimated at $15,000. The machinery will be depreciated over five years using the double-declining balance method. For the year 2013, Matile should record depreciation expense on this machinery of Group of answer choices $24,000. $27,600. $30,000. $46,000.
On January 1, 2016, Rexford Company purchased a drilling machine for $11,500. The machines has an estimated useful life of 4 years and a salvage value of $200. Given this information, if Rexford uses double-declining-balance method of depreciation, and sells the machine on December 31, 2017, for $3,000 cash. Then how much will be gain or loss on disposal of this asset? $ 2,750 loss $ 1,800 loss $1,562 gain $ 125 gain
On January 1, 2016, Gecho Corporation purchased computer equipment for $23,000. The equipment has an estimated useful life of 4 years and a salvage value of $400. Given this information, if Gecho uses the double-declining-balance method of depreciation and sells the equipment on December 31, 2017, for $250, it will have a a.$3,124 gain b.$250 gain c.$5,500 loss d.$3,600 loss
Rexford Company purchased a machine on January 1, 2017, for $57,600 cash. The machine has an estimated useful life of 8 years and a salvage value of $15,040. Rexford uses the double declining-balance method of depreciation for all its assets. What will be the machine's carrying amount as of December 31, 2018? a.$43,200 b.$32,400 c.$10,800 d.$14,400
On January 1, 2012, AB Ltd buys a truck for $42,000 cash. It has estimated residualvalue of $2,000, and an estimated life of 4 years, or 200,000 miles. The truck drove40,000 miles in 2012, 60,000 miles in 2013, 80,000 miles in 2014, and 20,000 miles in2015. Required:1. Assuming the company uses the straight-line method of deprecation completethe following table and show your computation/workings for the annualdepreciation expense. Date Asset Cost DepreciationExpenseAccumulatedDepreciationNet BookValue1.1.2012 42,000 - - 42,00012.31.201212.31.201312.31.201412.31.2015
On January 1, 2008, Minco Corporation purchased, for $100,000, equipment having a useful life of eight years and an estimated salvage value of $4,000. Minco has recorded monthly depreciation of the equipment on the straight-line method. On January 1, 2013, the equipment was sold for $38,000. As a result of this sale, Minco should recognize a. $0b. a $1,500 gainc. a $1,000 lossd. a $2,000 loss
Samson Manufacturing Company, a calendar year company, purchased a machine for $65,000 on January 1, 2015. At the date of purchase, Samson incurred the following additional costs: Loss on sale of old machinery $ 1,000 Freight-in 500 Installation cost 2,000 Testing costs prior to regular operation 300 The machine’s estimated salvage value was $5,000, and Samson estimated it would have a useful life of 20 years with depreciation being computed on the straight-line method. In January 2017, accessories costing $3,600 were added to the machine to reduce its operating costs. These accessories neither prolonged the machine’s life nor provided any additional salvage value.
. The Fisher Company purchased a machine on September 1, 2011, for $80,000. At the time of acquisition, the machine was estimated to have a useful life of eight years and an estimated salvage of $8,000. Fisher has recorded monthly depreciation using the straight-line method. On May 1, 2013, the machine was sold for $50,000. What should be the loss recognized from the sale of the machine?a. $15,000b. $2,500c. $5,000d. $7,500 Example: The Fisher Company purchased a machine on October 1, 2007, for $80,000. At the time of acquisition, the machine was estimated to have a useful life of five years and an estimated salvage of $5,000. Fisher has recorded monthly depreciation using the straight-line method. On April 1, 2009, the machine was sold for $50,000. What should be the loss recognized fromthe sale of the machine?a. $ 0b. $2,500c. $5,000d. $7,500 Annual depreciation expense = (80,000 – 5,000) / 5 = 15,000Monthly depreciation expense = 15,000 / 12 = 1,250Accumulated depreciation = (1250…
Rottino Company purchased a new cutting machine on January 1, 2017, at $17,000, paid in cash. It has been depreciated using the double-declining-balance method based on an estimated salvage value of $0 and an estimated useful life of 5 years. Prepare Rottino Company's journal entries to record the disposal of the machine on October 31, 2018, in these two independent situations (show your calculations to prove the result): Requirement: (i) Sold the machine for $7.600 cash. (ii) Exchange the old cutting machine with cash of $1,000 for a new cutting machine. The old machine had a fair value of $7,000.
Cullumber Company had the following assets on January 1, 2022. Item Cost Purchase Date Useful Life(in years) Salvage Value Machinery $72,000 Jan. 1, 2012 10 $ 0 Forklift 31,000 Jan. 1, 2019 5 0 Truck 37,400 Jan. 1, 2017 8 3,000 During 2022, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $12,100. The truck was discarded on December 31.Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on disposed assets. The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2021. (Credit account titles are automatically indented when the 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.) Date Account Titles and Explanation Debit Credit choose a transaction date…
Cullumber Company had the following assets on January 1, 2022. Item Cost Purchase Date Useful Life(in years) Salvage Value Machinery $83,000 Jan. 1, 2012 10 $ 0 Forklift 42,000 Jan. 1, 2019 5 0 Truck 48,400 Jan. 1, 2017 8 3,000 During 2022, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $13,200. The truck was discarded on December 31.Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on disposed assets. The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2021. Date Account Titles and Explanation Debit Credit Jan 1 Accumulated Depreciation - Equipment 83000 enter a credit amount Equipment enter a debit amount enter a credit amount June 30 depreciation expense enter a debit amount enter a credit amount enter a debit…