Mars co. need an additional machine on June 1, 2019 to meet the growing demand for its product. There were two alternatives, first cash purchase $560,000 and second paid now 50,000 and 10 semiannual payments of $30,000 due June30 and December 31 cach year (6% effective rate). The company chose the lower cost alternatives and paid installment 5200, testing 4600, registration fees 3676, and insurance for one ycar 6750. The expected economic life of this machine t is 8 years. Salvage value at that time is estimated to be $10,000. The company used sum of the year's depreciation method Required: 1) journalize the purchased of machine 2) calculate and journalize the depreciation in 31/12/2019 and 31/12/2020.

Mars co. need an additional machine on June 1, 2019 to meet the growing demand for its product. There were two alternatives, first cash purchase $560,000 and second paid now 50,000 and 10 semiannual payments of $30,000 due June30 and December 31 cach year (6% effective rate). The company chose the lower cost alternatives and paid installment 5200, testing 4600, registration fees 3676, and insurance for one ycar 6750. The expected economic life of this machine t is 8 years. Salvage value at that time is estimated to be $10,000. The company used sum of the year's depreciation method Required: 1) journalize the purchased of machine 2) calculate and journalize the depreciation in 31/12/2019 and 31/12/2020.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 13E: On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million....

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