Fundamental Accounting Principles
Fundamental Accounting Principles
24th Edition
ISBN: 9781260158595
Author: Wild
Publisher: MCG
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Chapter 10, Problem 6APSA
To determine

To prepare:

Journal entries.

Expert Solution
Check Mark

Explanation of Solution

    DateAccount Title and ExplanationPost refDebit($)Credit($)
    Jan 2
    Machinery

    1,78,000


    Cost for use


    2,840

    Installation cost


    1,160

    Cash


    182,000

    (Being cost incurred to purchase machinery and its installation)



     Table (1)

  • Purchase of machinery increases the value of assets hence debit machinery account.
  • As the cost of use is an expense being incurred by the companies in order to ready the equipment for use hence debit all expenses and losses.
  • Installation cost is an expense which decreases the asset hence debits all expenses and losses.
  • Cash is an asset which decreases while the machinery is being purchased
To determine

To prepare:

Journal entries in its first year in operations.

Expert Solution
Check Mark

Explanation of Solution

    DateAccount Title and ExplanationPost refDebit($)Credit($)
    Jan 2
    Accumulated Depreciation Expense

    28,000


    Machinery


    28,000

    (Being depreciation charged on machinery)



     Table (2)

  • Accumulated depreciation is an expense which decreases the asset of the company hence debits all expenses and losses.
  • Machinery is an asset whose value is decreased on account of such depreciation being applicable hence credit machinery account.
    DateAccount Title and ExplanationPost refDebit($)Credit($)
    Jan 2
    Accumulated Depreciation Expense

    28,000


    Machinery


    28,000

    (Being depreciation charged on machinery)



     Table (3)

  • Accumulated depreciation is an expense which decreases the asset of the company hence debits all expenses and losses.
  • Machinery is an asset whose value is decreased on account of such depreciation being applicable hence credit machinery account.
    DateAccount Title and ExplanationPost refDebit($)Credit($)
    Jan 2
    Cash

    15,000


    Accumulated Depreciation

    28,000


    Loss on asset disposal

    139,000


    Machinery


    182,000

    (Being machinery sold for cash)



     Table (4)

  • Cash is an asset which is increased on account of cash being received against the sale of machinery.
  • Accumulated depreciation is an expense against the asset as it decreases the value of asset hence debit accumulated depreciation account.
  • Loss on asset disposal is an expense which decreases the value of asset hence debits all expenses and losses.
  • Machinery as an asset which is decreased on account of being sold hence credit machinery account.
    DateAccount Title and ExplanationPost refDebit($)Credit($)
    Jan 2
    Cash

    50,000


    Accumulated Depreciation

    28,000


    Loss on asset disposal

    104,000


    Machinery


    182,000

    (Being machinery sold for cash)



     Table (5)

  • Cash is an asset which is increased on account of amount received on sale of machinery.
  • Accumulated depreciation decreases the value of asset hence debit all expenses and losses.
  • Loss on asset disposal decreases the values of asset hence debit all expenses and losses.
  • Machinery is an asset which is decreased on account of sale of the machinery hence credit machinery account.
    DateAccount Title and ExplanationPost refDebit($)Credit($)
    Jan 2
    Cash

    30,000


    Accumulated Depreciation

    140,000


    Loss from fire

    12,000


    Machinery


    182,000

    (Being machinery sold for cash)



     Table (6)

  • Cash is asset which is increased on account insurance amount received from the insurance company.
  • Accumulated depreciation is an expense which decreases the asset hence debit accumulated depreciation account.
  • Loss from fire is an expense which decreases the value of asset hence debits all expenses and losses.
  • Machinery is an asset which is decreased from such an accident of fire hence credit machinery account.

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Chapter 10 Solutions

Fundamental Accounting Principles

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 - Cost of plant assets C1 Kegler Bowling installs...Ch. 10 - Assigning costs to plant assets C1 Q Listed below...Ch. 10 - Straight-line depreciation P1 On January 1= the...Ch. 10 - QS 10-' Units-of-production depreciation On...Ch. 10 - QS10-5 Double-declining-balance method P1 A...Ch. 10 - Prob. 6QSCh. 10 - Prob. 7QSCh. 10 - Prob. 8QSCh. 10 - Revenue and capital expenditures C3 1. Classify...Ch. 10 - Prob. 10QSCh. 10 - Natural resources and depletion P3 Perez Company...Ch. 10 - Prob. 12QSCh. 10 - Prob. 13QSCh. 10 - Prob. 14QSCh. 10 - Prob. 15QSCh. 10 - Prob. 16QSCh. 10 - Exercise 10-1 Cost of plant assets C1 Q Rizio Co....Ch. 10 - Prob. 2ECh. 10 - Prob. 3ECh. 10 - Exercise 104 Straight-line depreciation P1 Ramirez...Ch. 10 - Exercise 10-5 Units-of-production depreciation P1...Ch. 10 - Exercise 10-6 Double-declining-balance...Ch. 10 - Exercise 10-7 Straight-line depreciation P1 New...Ch. 10 - Exercise 10-8 Double-declining-balance...Ch. 10 - Exercise 10-9 Straight-line depreciation and...Ch. 10 - Exercise 10-10 Double-declining-balance...Ch. 10 - Exercise 10-11 Straight-line, partial-year...Ch. 10 - Exercise 10-12 Dauble-declining-balance....Ch. 10 - Exercise 10-13 Revising depreciation C2 Apex...Ch. 10 - Exercise 10-14 Ordinary repairs, extraordinary...Ch. 10 - Exercise 10.15 Extraordinary repairs; plant asset...Ch. 10 - Exercise 10-16 Disposal of assets P2 Diaz Company...Ch. 10 - Exercise 10-17 Partial-year depreciation: disposal...Ch. 10 - Exercise 10-18 Depletion of natural resources P3...Ch. 10 - Exercise 10-19 Amortization of intangible assets...Ch. 10 - Exercise 10-20 Goodwill P4 Robinson Company...Ch. 10 - Exercise 10-21 Preparing a balance sheet P1 P3...Ch. 10 - Exercise 10-22 Evaluating efficient use of assets...Ch. 10 - Exercise 10-23A Exchanging assets P5 Gilly...Ch. 10 - Prob. 24ECh. 10 - Problem 10-1A Plant asset costs; depreciation...Ch. 10 - Problem 1O-2A Depreciation methods P1 A machine...Ch. 10 - Problem 10-3A Asset cost allocation; straight-line...Ch. 10 - Problem 10-4A Computing and revising depreciation;...Ch. 10 - Problem 10-5A Computing and revising depreciation;...Ch. 10 - Problem 1O-6A Disposal of plant assets C1 P1...Ch. 10 - Problem 1O7A Natural resources P3 On July 23 of...Ch. 10 - Prob. 8APSACh. 10 - Problem 10-1B Plant asset costs; depreciation...Ch. 10 - Problem 10-28 Depreciation methods P1 On January...Ch. 10 - Problem 10-3B Asset cost allocation; straight-line...Ch. 10 - Prob. 4BPSBCh. 10 - Problem 10-5B Computing and revising...Ch. 10 - Problem 1O-6B Disposal of plant assets C1 P1 P2 On...Ch. 10 - Prob. 7BPSBCh. 10 - Prob. 8BPSBCh. 10 - Prob. 10SPCh. 10 - Prob. 1AACh. 10 - Prob. 2AACh. 10 - Prob. 3AACh. 10 - Prob. 1BTNCh. 10 - Prob. 2BTNCh. 10 - Prob. 3BTNCh. 10 - Prob. 4BTNCh. 10 - Prob. 5BTNCh. 10 - Prob. 6BTN
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