Keira's Kar Company purchases a Machine and incurs the following costs: $250,000 $5,000 $1,500 $2,000 $500 Purchase Price Sales Tax Installation Cost Electricity Costs for the Year Deliver Costs Required: a. Calculate the Total Cost of the Machine and RECORD the purchase for CASH in the Journal. b. Keira estimates the MACHINE will have a $10,000 Salvage Value and a 5 Year useful life. Calculate the annual DEPRECIATION EXPENSE and RECORD it in the Journal. d. c. After Year 1... What is the Book Value or Carrying Value of the Machine? Assume that after 5 years, and the Machine is FULLY Depreciated (Accumulated Depreciation Balance = $257,000), Keira sells the Machine for $8,000 Cash. Calculate the Gain or Loss on Sale.....and Record the Sale of the Machine in the Journal.

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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2. Keira's Kar Company purchases a Machine and incurs the following costs:
$250,000
$5,000
$1,500
$2,000
$500
Purchase Price
Sales Tax
Installation Cost
Electricity Costs for the Year
Deliver Costs
Required:
Calculate the Total Cost of the Machine and RECORD the purchase for CASH in
the Journal.
b. Keira estimates the MACHINE will have a $10,000 Salvage Value and a 5 Year
useful life. Calculate the annual DEPRECIATION EXPENSE and RECORD it in the
Journal.
d.
c. After Year 1... What is the Book Value or Carrying Value of the Machine?
Assume that after 5 years, and the Machine is FULLY Depreciated (Accumulated
Depreciation Balance = $257,000), Keira sells the Machine for $8,000 Cash.
Calculate the Gain or Loss on Sale......and Record the Sale of the Machine in the
Journal.
Transcribed Image Text:2. Keira's Kar Company purchases a Machine and incurs the following costs: $250,000 $5,000 $1,500 $2,000 $500 Purchase Price Sales Tax Installation Cost Electricity Costs for the Year Deliver Costs Required: Calculate the Total Cost of the Machine and RECORD the purchase for CASH in the Journal. b. Keira estimates the MACHINE will have a $10,000 Salvage Value and a 5 Year useful life. Calculate the annual DEPRECIATION EXPENSE and RECORD it in the Journal. d. c. After Year 1... What is the Book Value or Carrying Value of the Machine? Assume that after 5 years, and the Machine is FULLY Depreciated (Accumulated Depreciation Balance = $257,000), Keira sells the Machine for $8,000 Cash. Calculate the Gain or Loss on Sale......and Record the Sale of the Machine in the Journal.
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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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