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At the beginning of the year, Grillo Industries bought three used machines from Freeman Incorporated....

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Accounting

At the beginning of the year, Grillo Industries bought three used machines from Freeman Incorporated. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts.

Machine A Machine B Machine C
Cost of the asset $ 9,800 $ 39,000 $ 22,800
Installation costs 950 2,900 2,000
Renovation costs prior to use 750 2,500 3,000
Repairs after production began 500 900 1,500

By the end of the first year, each machine had been operating 8,000 hours.

Required:

Compute the cost of each machine.

Prepare the journal entry to record depreciation expense at the end of year 1, assuming the following:

Estimates
Machine Life Residual Value Depreciation Method
A 5 years $ 1,800 Straight-line
B 20,000 hours 1,400 Units-of-production
C 10 years 2,200 Double-declining-balance

Prepare the journal entry to record depreciation expense at the end of year 1, assuming the following: (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)

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