CP9-1 Computing Acquisition Cost and Recording Depreciation under Three Alternative Methods [LO 9- 2, LO 9-3) At the beginning of the year, Young Company bought two used machines from Vince, Inc. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts. Machine A $7,600 200 1,500 400 Machine B $25,608 600 1,200 350 Amount paid for asset Installation costs Renovation costs prior to use Repairs after production began By the end of the first year, each machine had been operating 7,000 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 Machine Life Residual Value Depreciation Method 48,800 hours 5 years $ 600 1,080 Straight-line Units-of-production Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the cost of each machine. Cost of Machine Machine A Machine B

CP9-1 Computing Acquisition Cost and Recording Depreciation under Three Alternative Methods [LO 9- 2, LO 9-3) At the beginning of the year, Young Company bought two used machines from Vince, Inc. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts. Machine A $7,600 200 1,500 400 Machine B $25,608 600 1,200 350 Amount paid for asset Installation costs Renovation costs prior to use Repairs after production began By the end of the first year, each machine had been operating 7,000 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 Machine Life Residual Value Depreciation Method 48,800 hours 5 years $ 600 1,080 Straight-line Units-of-production Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the cost of each machine. Cost of Machine Machine A Machine B

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Description: CP9-1 Computing Acquisition Cost and Recording Depreciation under Three Alternative Methods (LO 9-2, LO 9-3]At the beginning of the year, Young Company bought two used machines from Vince, Inc. The machines immediately were overhauled,were installed

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Comparison of Depreciation Methods P4. Italian Construction Company purchased a new crane for $360,500 at the begin- ning of year 1. The crane has an estimated residual value of $35,000 and an estimated useful life of six years. The crane is expected to last 10,000 hours. It was used 1,800 hours in year 1; 2,000 hours in year 2; 2,500 hours in year 3; 1,500 hours in year 4; 1,200 hours in year 5; and 1,000 hours in year 6. REQUIRED 1. Compute the annual depreciation and carrying value for the new crane for each of the six years under each of the following methods: (a) straight-line, (b) production, and (c) double-declining-balance (round percentage to two decimal places.) 2. If the crane is sold for $250,000 after year 3, what would be the amount of gain or loss under each method? 3. ACCOUNTING CONNECTION ▶ Do the three methods differ in their effect on the company's profitability? Do they differ in their effect on the company's operating cash flows? Explain.
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7 Graw Required information PA9-1 (Algo) Computing Acquisition Cost and Recording Depreciation under Three Alternative Methods [LO 9-2, LO 9-3] [The following information applies to the questions displayed below.] At the beginning of the year, Shamrock Unlimited bought three used machines. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts. Details for Machine A are provided below. Cost of the asset Installation costs Renovation costs prior to use Repairs after production began PA9-1 (Algo) Part 2 2. Compute year 2 straight-line depreciation expense for Machine A, assuming an estimated life of 4 years and $1,000 residual value. Answer is complete but not entirely correct. Year 2 straight-line depreciation expense 2.140 x Type here to search $9,400 840 720 590 $
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Question Description The original cost of a machine was $60,000. After $45,000 of depreciation was recorded, the machine was traded in on a new machine of like purpose priced at $75,000. A $10,500 trade-in allowance was received on the old machine and the balance of $64,500 was paid in cash. Prepare the general journal entry to record this trade-in.
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