FUND.ACCT.PRIN -ONLINE ONLY  >I<
FUND.ACCT.PRIN -ONLINE ONLY >I<
22nd Edition
ISBN: 9780077632878
Author: Wild
Publisher: MCG
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Chapter 10, Problem 17E

Requirement-1:

To determine

To prepare: The journal entries to record the partial year depreciation and disposal of machine on July 1, 2019, if the machine is sold for $45,500 cash

Requirement-1:

Expert Solution
Check Mark

Answer to Problem 17E

Solution: The journal entries to record the partial year depreciation and disposal of machine are as follows:

    Journal entries
    Date Account titles Debit Credit
    Jul. 1, 2019
    Depreciation Expense- Machine
    $ 7,500


    Accumulated Depreciation- Machine

    $ 7,500




    Jul. 1, 2019
    Cash
    $ 45,500


    Accumulated Depreciation- Machine
    $ 67,500


    Gain on sale of Machine

    $ 8,000

    Machine

    $ 105,000

Explanation of Solution

Explanation:



The journal entries to record the partial year depreciation and disposal of machine are explained as follows:

    Journal entries
    Date Account titles Debit Credit
    Jul. 1, 2019
    Depreciation Expense- Machine
    $ 7,500


    Accumulated Depreciation- Machine

    $ 7,500

    (Being partial year depreciation recorded for the year 2019)






    Jul. 1, 2019
    Cash
    $ 45,500


    Accumulated Depreciation- Machine
    $ 67,500


    Gain on sale of Machine 45500-(105000-67500)

    $ 8,000

    Machine

    $ 105,000
    (Being machine sold for cash)


Working note:

    Calculation of Straight line method depreciation:


    Cost (A)
    $ 105,000
    Salvage Value (B)
    $ -
    Life Years (C)
    7
    Annual Straight Line Depreciation =(A-B)/C = $ 15,000


    Number of months asset used in the year 2019 (Jan. 1 to July 1, 2019 )
    6
    Depreciation for the year 2019 = 15000*6/12 = $ 7,500
    Depreciation for first 4 years (2015 to 2018) = 15000*4 =
    $ 60,000
    Accumulated depreciation balance as on July 1, 2019 = (60000+7500)=$ 67,500

Conclusion

Conclusion:

Hence, the journal entries are prepared to record the partial year depreciation and disposal of the machine.

Requirement-2:

To determine

To prepare: The journal entries to record the partial year depreciation and disposal of machine on July 1, 2019, if the machine is destroyed and insurance claim received is $25,000

Requirement-2:

Expert Solution
Check Mark

Answer to Problem 17E

Solution: The journal entries to record the partial year depreciation and disposal of machine are as follows:

    Journal entries
    Date Account titles Debit Credit
    Jul. 1, 2019
    Depreciation Expense- Machine
    $ 7,500


    Accumulated Depreciation- Machine

    $ 7,500




    Jul. 1, 2019
    Cash
    $ 25,000


    Accumulated Depreciation- Machine
    $ 67,500


    Loss on sale of Machine
    $ 12,500


    Machine

    $ 105,000

Explanation of Solution

Explanation:



The journal entries to record the partial year depreciation and disposal of machine are explained as follows:

    Journal entries
    Date Account titles Debit Credit
    Jul. 1, 2019
    Depreciation Expense- Machine
    $ 7,500


    Accumulated Depreciation- Machine

    $ 7,500

    (Being partial year depreciation recorded for the year 2019)






    Jul. 1, 2019
    Cash
    $ 25,000


    Accumulated Depreciation- Machine
    $ 67,500


    Loss on sale of Machine (105000-67500)-25,000
    $ 12,500


    Machine

    $ 105,000
    (Being insurance claim received for machine destroyed in fire)


Working note:

    Calculation of Straight line method depreciation:


    Cost (A)
    $ 105,000
    Salvage Value (B)
    $ -
    Life Years (C)
    7
    Annual Straight Line Depreciation =(A-B)/C = $ 15,000


    Number of months asset used in the year 2019 (Jan. 1 to July 1, 2019 )
    6
    Depreciation for the year 2019 = 15000*6/12 = $ 7,500
    Depreciation for first 4 years (2015 to 2018) = 15000*4 =
    $ 60,000
    Accumulated depreciation balance as on July 1, 2019 = (60000+7500)=$ 67,500

Conclusion

Conclusion:

Hence, the journal entries are prepared to record the partial year depreciation and disposal of the machine.

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Chapter 10 Solutions

FUND.ACCT.PRIN -ONLINE ONLY >I<

Ch. 10 - Prob. 11DQCh. 10 - Prob. 12DQCh. 10 - Prob. 13DQCh. 10 - Prob. 14DQCh. 10 - Prob. 15DQCh. 10 - Prob. 16DQCh. 10 - Prob. 17DQCh. 10 - Prob. 18DQCh. 10 - Prob. 19DQCh. 10 - Prob. 20DQCh. 10 - Prob. 21DQCh. 10 - Prob. 1QSCh. 10 - Prob. 2QSCh. 10 - On January 2,2015. the Matthews Band acquires...Ch. 10 - Units-of-production On January 2,2015. the...Ch. 10 - Prob. 5QSCh. 10 - Prob. 6QSCh. 10 - Prob. 7QSCh. 10 - Prob. 8QSCh. 10 - Prob. 9QSCh. 10 - Prob. 10QSCh. 10 - Prob. 11QSCh. 10 - Prob. 12QSCh. 10 - Prob. 13QSCh. 10 - Prob. 14QSCh. 10 - Prob. 15QSCh. 10 - Prob. 1ECh. 10 - Prob. 2ECh. 10 - Prob. 3ECh. 10 - Prob. 4ECh. 10 - Exercise 10-5 Units-of-production depreciation P1...Ch. 10 - Exercise 10-6 Double-declining-balance...Ch. 10 - Prob. 7ECh. 10 - Exercise 10-8 Double-declining-balance...Ch. 10 - Prob. 9ECh. 10 - Exercise 10-10 Double-declining-balance...Ch. 10 - Prob. 11ECh. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Prob. 14ECh. 10 - Prob. 15ECh. 10 - Prob. 16ECh. 10 - Prob. 17ECh. 10 - Prob. 18ECh. 10 - Prob. 19ECh. 10 - Prob. 20ECh. 10 - Prob. 21ECh. 10 - Prob. 22ECh. 10 - Prob. 23ECh. 10 - Prob. 24ECh. 10 - Prob. 25ECh. 10 - Prob. 1APSACh. 10 - Problem 1O-2A Depreciation methods P1 A machine...Ch. 10 - Prob. 3APSACh. 10 - Prob. 4APSACh. 10 - Prob. 5APSACh. 10 - Prob. 6APSACh. 10 - Problem 1O7A Natural resources P3 On July 23 of...Ch. 10 - Prob. 8APSACh. 10 - Prob. 1BPSBCh. 10 - Problem 10-28 Depreciation methods P1 On January...Ch. 10 - Prob. 3BPSBCh. 10 - Prob. 4BPSBCh. 10 - Prob. 5BPSBCh. 10 - Problem 1O-6B Disposal of plant assets C1 P1 P2 On...Ch. 10 - Problem 10-78 Natural resources P3 On February 19...Ch. 10 - Prob. 8BPSBCh. 10 - Prob. 10SPCh. 10 - Refer to the financial statements of Apple in...Ch. 10 - Prob. 2BTNCh. 10 - Prob. 3BTNCh. 10 - Prob. 4BTNCh. 10 - Prob. 5BTNCh. 10 - Each ream member is to become an expert on one...Ch. 10 - Prob. 7BTNCh. 10 - Prob. 8BTNCh. 10 - Prob. 9BTN
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Accounting for Derivatives_1.mp4; Author: DVRamanaXIMB;https://www.youtube.com/watch?v=kZky1jIiCN0;License: Standard Youtube License
Depreciation|(Concept and Methods); Author: easyCBSE commerce lectures;https://www.youtube.com/watch?v=w4lScJke6CA;License: Standard YouTube License, CC-BY