December 31, 2022, Splish Brothers Inc. owns a machine with a carrying amount of $868,000. The original cost and accumulated depreciation for the machine on this date are as follows: Machine Accumulated depreciation $1,300,000 432,000 $868,000 Depreciation is calculated at $72,000 per year on a straight-line basis. A set of independent situations follows. For each situation, prepare the journal entry for Splish Brothers to record the transaction. Ensure that depreciation entries are recorded to update the machine's carrying amount before its disposal. Assume that Splish Brothers uses IFRS for financial statement purposes. (a) A fire completely destroyed the machine on August 31, 2023. An insurance settlement of $419,000 was received for this casualty... Assume the settlement was received immediately. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts list all dobit credit entries.)
December 31, 2022, Splish Brothers Inc. owns a machine with a carrying amount of $868,000. The original cost and accumulated depreciation for the machine on this date are as follows: Machine Accumulated depreciation $1,300,000 432,000 $868,000 Depreciation is calculated at $72,000 per year on a straight-line basis. A set of independent situations follows. For each situation, prepare the journal entry for Splish Brothers to record the transaction. Ensure that depreciation entries are recorded to update the machine's carrying amount before its disposal. Assume that Splish Brothers uses IFRS for financial statement purposes. (a) A fire completely destroyed the machine on August 31, 2023. An insurance settlement of $419,000 was received for this casualty... Assume the settlement was received immediately. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts list all dobit credit entries.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Topic Video
Question
3
Transcribed Image Text:Splish Brothers Inc. owns a machine with a carrying amount of $868,000. The original cost and accumulated
depreciation for the machine on this date are as follows:
Machine
Accumulated depreciation
$1,300,000
(a)
432,000
$868,000
Depreciation is calculated at $72,000 per year on a straight-line basis.
A set of independent situations follows. For each situation, prepare the journal entry for Splish Brothers to record the transaction.
Ensure that depreciation entries are recorded to update the machine's carrying amount before its disposal. Assume that Splish
Brothers uses IFRS for financial statement purposes.
A fire completely destroyed the machine on August 31, 2023. An insurance settlement of $419,000 was received for this casualty. -
Assume the settlement was received immediately. (Credit account titles are automatically indented when the amount is entered. Do not
indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before
credit entries.)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education