70.2K

Verified Solution

Link Copied!

9 At the beginning of the year, Oakmont Company bought three used machines from American Manufacturing, Inc. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts. Amount paid for asset Installation costs Renovation costs prior to use Repairs after production began Machine A $20,000 500 300 620 Machine B $10,500 900 700 1,300 Machine C $10,200 600 1,000 880 10 points By the end of the first year, each machine had been operating 4,000 hours. eBook Required: 1. Compute the cost of each machine. 2. Prepare the journal entry to record depreciation expense at the end of year 1, assuming the following: Print Machine A B C Estimates Life Residual Value 5 years $1,500 20,000 hours 900 10 years 2,400 Depreciation Method Straight-line Units-of-production Double-declining-balance Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entry to record depreciation expense at the end of year 1, assuming the following: (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list View journal entry worksheet 10 points Complete this question by entering your answers in the tabs below. eBook Required 1 Required 2 Prepare the journal entry to record depreciation expense at the end of year 1, assuming the following: (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Print View transaction list View journal entry worksheet No Transaction General Journal Debit Credit 1 1 Depreciation Expense Accumulated DepreciationMachine A Accumulated Depreciation Machine B Accumulated DepreciationMachine C 10 15 points The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International during 2018 and 2019. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents. 2018 January 2 Paid $100,000 cash to purchase storage shed components. January 3 Paid $5,000 cash to have the storage shed erected. The storage shed has an estimated life of 10 years and a residual value of $8,000. April 1 Paid $46,000 cash to purchase a pickup truck for use in the business. The truck has an estimated useful life of five years and a residual value of $6,000. May 13 Paid $400 cash for minor repairs to the pickup truck's upholstery. July 1 Paid $15,000 cash to purchase patent rights on a new paper bag manufacturing process. The patent is estimated to have a remaining useful life of five years. December 31 Recorded depreciation and amortization on the pickup truck, storage shed, and patent. 2019 June 30 Sold the pickup truck for $39,000 cash. (Record the depreciation on the truck prior to recording its disposal.) December 31 Recorded depreciation on the storage shed. Also determined that the patent was impaired and wrote off its remaining book value (i.e., wrote down the book value to zero). Required: Prepare the journal entries required on each of the above dates. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.) eBook Print View transaction list View journal entry worksheet No Date General Journal Debit Credit 1 100,000 January 02, 2018 Building Cash 100,000 2 5,000 January 03, 2018 Building Cash 5,000 3 April 01, 2018 Cash

Answer & Explanation Solved by verified expert

See Answer