On December 31, 2020, Riverbed Inc. has a machine with a book value of $1,410,000. The original cost and related accumulateddepreciation at this date are as follows.Machine$1,950,000Less: Accumulated depreciation540,000Book value$1,410,000Depreciation is computed at $90,000 per year on a straight-line basis.Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record thetransaction. Make sure that depreciation entries are made to update the book value of the machine prior to its disposal.(a)Your answer is correct.A fire completely destroys the machine on August 31, 2021. An insurance settlement of $645,000 was received for this casualty.Assume the settlement was received immediately. (Credit account titles are automatically indented when amount is entered. Do notindent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)DateAccount Titles and ExplanationDebitCreditugust 31, 2021Depreciation Expense60000 (b)On April 1, 2021, Riverbed sold the machine for $1,560,000 to Yoakam Company. (Credit account titles are automatically indentedwhen amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for theamounts.)DateAccount Titles and ExplanationDebitCreditApril 1, 2021(To record current depreciation.)April 1, 2021(To record sale of the machine.)eTextbook and MediaList of Accounts

Solution: Depreciation in 2021 upto April 1, 2021 = $90,000*3/12 = $22,500 Book value of machine on…

On December 31, 2020, Riverbed Inc. has a machine with a book value of $1,410,000. The original cost and related accumulated depreciation at this date are as follows. Machine $1,950,000 Less: Accumulated depreciation 540,000 Book value $1,410,000 Depreciation is computed at $90,000 per year on a straight-line basis. Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record transaction. Make sure that depreciation entries are made to update the book value of the machine prior to its disposal.

On December 31, 2020, Riverbed Inc. has a machine with a book value of $1,410,000. The original cost and related accumulated depreciation at this date are as follows. Machine $1,950,000 Less: Accumulated depreciation 540,000 Book value $1,410,000 Depreciation is computed at $90,000 per year on a straight-line basis. Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record transaction. Make sure that depreciation entries are made to update the book value of the machine prior to its disposal.

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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