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 Installation costs Renovation costs prior to use Repairs after production began $9,600 $38,800 2,700 2,300 $22,600 1,800 2,800 1,300 850 650 700 700 By the end of the first year, each machine had been operating 8,000 hours. 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: Estimates Depreciation Method Straight-line Units-of-production Double-declining-balance Machine Life Residual Value $1,600 1, 200 2,000 A 5 years 20,000 hours 10 years В

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 Installation costs Renovation costs prior to use Repairs after production began $9,600 $38,800 2,700 2,300 $22,600 1,800 2,800 1,300 850 650 700 700 By the end of the first year, each machine had been operating 8,000 hours. 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: Estimates Depreciation Method Straight-line Units-of-production Double-declining-balance Machine Life Residual Value $1,600 1, 200 2,000 A 5 years 20,000 hours 10 years В

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter10: Long-lived Tangible And Intangible Assets

Section: Chapter Questions

Problem 29P

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