On January 1, 2022, Swifty Company purchased the following two machines for use in its production process. Machine A: Machine B: (a) 1. 2. The cash price of this machine was $53,500. Related expenditures also paid in cash included: sales tax $2,600, shipping costs $100, insurance during shipping $120, installation and testing costs $80, and $150 of oil and lubricants to be used with the machinery during its first year of operations. Swifty estimates that the useful life of the machine is 5 years with a $4,200 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used. Prepare the following for Machine A. (Credit account titles are automatically indented when 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) 1. The recorded cost of this machine was $180,000. Swifty estimates that the useful life of the machine is 4 years with a $-9,100 salvage value remaining at the end of that time period. 2 Your answer is partially correct. No. Account Titles and Explanation The journal entry to record its purchase on January 1, 2022. The journal entry to record annual depreciation at December 31, 2022. Machine Cash Depreciation Expense Accumulated Depreciation-Machine Debit 56550 10470 Credit ✓ 56550 10470
On January 1, 2022, Swifty Company purchased the following two machines for use in its production process. Machine A: Machine B: (a) 1. 2. The cash price of this machine was $53,500. Related expenditures also paid in cash included: sales tax $2,600, shipping costs $100, insurance during shipping $120, installation and testing costs $80, and $150 of oil and lubricants to be used with the machinery during its first year of operations. Swifty estimates that the useful life of the machine is 5 years with a $4,200 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used. Prepare the following for Machine A. (Credit account titles are automatically indented when 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) 1. The recorded cost of this machine was $180,000. Swifty estimates that the useful life of the machine is 4 years with a $-9,100 salvage value remaining at the end of that time period. 2 Your answer is partially correct. No. Account Titles and Explanation The journal entry to record its purchase on January 1, 2022. The journal entry to record annual depreciation at December 31, 2022. Machine Cash Depreciation Expense Accumulated Depreciation-Machine Debit 56550 10470 Credit ✓ 56550 10470
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2022, Swifty Company purchased the following two machines for use in its production process.
Machine A:
Machine B:
(a)
1.
2.
Prepare the following for Machine A. (Credit account titles are automatically indented when 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)
The cash price of this machine was $53,500. Related expenditures also paid in cash included: sales tax $2,600,
shipping costs $100, insurance during shipping $120, installation and testing costs $80, and $150 of oil and
lubricants to be used with the machinery during its first year of operations. Swifty estimates that the useful life of
the machine is 5 years with a $4,200 salvage value remaining at the end of that time period. Assume that the
straight-line method of depreciation is used.
1.
The recorded cost of this machine was $180,000. Swifty estimates that the useful life of the machine is 4 years with
a $-9,100 salvage value remaining at the end of that time period.
2.
Your answer is partially correct.
No. Account Titles and Explanation
The journal entry to record its purchase on January 1, 2022.
The journal entry to record annual depreciation at December 31, 2022.
Machine
Cash
Depreciation Expense
Accumulated Depreciation-Machine
Debit
56550
10470
Credit
.
56550
10470
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