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On January 1, 2021, Ayayai Company purchased on credit machinery costing $193,500 and incurred $6,605 in installation costs. The machinery has an estimated useful life of 15 years and a residual value of $11,960. The company uses the straight-line method of depreciation. At the end of 2022, Ayayai recorded depreciation and assessed the asset, determining a recoverable amount of

On January 1, 2021, Ayayai Company purchased on credit machinery costing $193,500 and incurred $6,605 in installation costs. The machinery has an estimated useful life of 15 years and a residual value of $11,960. The company uses the straight-line method of depreciation. At the end of 2022, Ayayai recorded depreciation and assessed the asset, determining a recoverable amount of

FINANCIAL ACCOUNTING
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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On January 1, 2021, Ayayai Company purchased on credit machinery costing $193,500 and incurred $6,605 in installation costs. The machinery has an estimated useful life of 15 years and a residual value of $11,960. The company uses the straight-line method of depreciation. At the end of 2022, Ayayai recorded depreciation and assessed the asset, determining a recoverable amount of $161,200. Ayayai sold the equipment to Voilex Corporation on June 30, 2023, for $158,600. Prepare the necessary entries assuming Ayayai has a December 31 year-end. (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. Round answers to O decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) Date V Account Titles and Explanation Machinery Depreciation Expense Accumulated Depreciation - Machinery (To record depreciation expense) Equipment Equipment (To record depreciation expense) (To record loss on impairment) (To record depreciation expense) (To record depreciation expense) (To record disposal of machinery) Debit Credit
Transcribed Image Text:On January 1, 2021, Ayayai Company purchased on credit machinery costing $193,500 and incurred $6,605 in installation costs. The machinery has an estimated useful life of 15 years and a residual value of $11,960. The company uses the straight-line method of depreciation. At the end of 2022, Ayayai recorded depreciation and assessed the asset, determining a recoverable amount of $161,200. Ayayai sold the equipment to Voilex Corporation on June 30, 2023, for $158,600. Prepare the necessary entries assuming Ayayai has a December 31 year-end. (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. Round answers to O decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) Date V Account Titles and Explanation Machinery Depreciation Expense Accumulated Depreciation - Machinery (To record depreciation expense) Equipment Equipment (To record depreciation expense) (To record loss on impairment) (To record depreciation expense) (To record depreciation expense) (To record disposal of machinery) Debit Credit
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