The following transactions occurred during 2025. Assume that depreciation of 10% per year is charged on all machinery and 5% per year on buildings, on a straight-line basis, with no estimated salvage value. Depreciation is charged for a full year on all fixed assets acquired during the year, and no depreciation is charged on fixed assets disposed of during the year. Jan. 30 Mar. 10 Mar. 20 May 18 June 23 A building that cost $137,280 in 2008 is torn down to make room for a new building. The wrecking contractor was paid $5,304 and was permitted to keep all materials salvaged. Date Machinery that was purchased in 2018 for $16,640 is sold for $3,016 cash, f.o.b. purchaser's plant. Freight of $312 is paid on the sale of this machinery. A gear breaks on a machine that cost $9,360 in 2017. The gear is replaced at a cost of $2,080. The replacement does not extend the useful life of the machine but does make the machine more efficient. A special base installed for a machine in 2019 when the machine was purchased has to be replaced at a cost of $5,720 because of defective workmanship on the original base. The cost of the machinery was $14,768 in 2019. The cost of the base was $3,640, and this amount was charged to the Machinery account in 2019. One of the buildings is repainted at a cost of $7,176. It had not been painted since it was constructed in 2021. Prepare general journal entries for the transactions. (Record journal entries in the order presented in the problem. 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 o for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit
The following transactions occurred during 2025. Assume that depreciation of 10% per year is charged on all machinery and 5% per year on buildings, on a straight-line basis, with no estimated salvage value. Depreciation is charged for a full year on all fixed assets acquired during the year, and no depreciation is charged on fixed assets disposed of during the year. Jan. 30 Mar. 10 Mar. 20 May 18 June 23 A building that cost $137,280 in 2008 is torn down to make room for a new building. The wrecking contractor was paid $5,304 and was permitted to keep all materials salvaged. Date Machinery that was purchased in 2018 for $16,640 is sold for $3,016 cash, f.o.b. purchaser's plant. Freight of $312 is paid on the sale of this machinery. A gear breaks on a machine that cost $9,360 in 2017. The gear is replaced at a cost of $2,080. The replacement does not extend the useful life of the machine but does make the machine more efficient. A special base installed for a machine in 2019 when the machine was purchased has to be replaced at a cost of $5,720 because of defective workmanship on the original base. The cost of the machinery was $14,768 in 2019. The cost of the base was $3,640, and this amount was charged to the Machinery account in 2019. One of the buildings is repainted at a cost of $7,176. It had not been painted since it was constructed in 2021. Prepare general journal entries for the transactions. (Record journal entries in the order presented in the problem. 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 o for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit
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
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 8P: At the beginning of 2020, Holden Companys controller asked you to prepare correcting entries for the...
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:The following transactions occurred during 2025. Assume that depreciation of 10% per year is charged on all machinery and 5% per
year on buildings, on a straight-line basis, with no estimated salvage value. Depreciation is charged for a full year on all fixed assets
acquired during the year, and no depreciation is charged on fixed assets disposed of during the year.
Jan. 30
Mar. 10
Mar. 20
May 18
June 23
Date
1/30
3/10
Prepare general journal entries for the transactions. (Record journal entries in the order presented in the problem. 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 o for the amounts. List all debit entries before credit entries.)
3/20
5/18
A building that cost $137,280 in 2008 is torn down to make room for a new building. The wrecking contractor was paid
$5,304 and was permitted to keep all materials salvaged.
6/23
Machinery that was purchased in 2018 for $16,640 is sold for $3,016 cash, f.o.b. purchaser's plant. Freight of $312 is
paid on the sale of this machinery.
A gear breaks on a machine that cost $9,360 in 2017. The gear is replaced at a cost of $2,080. The replacement does
not extend the useful life of the machine but does make the machine more efficient.
A special base installed for a machine in 2019 when the machine was purchased has to be replaced at a cost of
$5,720 because of defective workmanship on the original base. The cost of the machinery was $14,768 in 2019. The
cost of the base was $3,640, and this amount was charged to the Machinery account in 2019.
One of the buildings is repainted at a cost of $7,176. It had not been painted since it was constructed in 2021.
Account Titles and Explanation
Accumulated Depreciation - Buildings
Loss on Disposal of Buildings
Buildings
Cash
Cash
Accumulated Depreciation - Machinery
Loss on Disposal of Machinery
Machinery
Machinery
Cash
Machinery
Accumulated Depreciation - Machinery
Loss on Disposal of Machinery
Machinery
Cash
Maintenance and Repairs Expense
Cash
‒‒‒‒‒‒‒‒‒‒‒‒‒‒‒‒
Debit
116688
25896
2704
11648
2288
0
2080
0
5720
2184
1456
0
7176
Credit
O
137280
5304
16640
2080
3640
5720
O
7176
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