On January 1, 2022, Windsor Company purchased the following two machines for use in its production process. Machine A: The cash price of this machine was $43,500. Related expenditures also paid in cash included: sales tax $3,550, shipping costs $150, insurance during shipping $50, installation and testing costs $100, and $200 of oil and lubricants to be used with the machinery during its first year of operations. Windsor estimates that the useful life of the machine is 5 years with a $5,250 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used. Machine B: The recorded cost of this machine was $180,000. Windsor estimates that the useful life of the machine is 4 years with a $16,800 salvage value remaining at the end of that time period. (a) 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 0 for the amounts.) 1. The journal entry to record its purchase on January 1, 2022. 2. The journal entry to record annual depreciation at December 31, 2022.
On January 1, 2022, Windsor Company purchased the following two machines for use in its production process. Machine A: The cash price of this machine was $43,500. Related expenditures also paid in cash included: sales tax $3,550, shipping costs $150, insurance during shipping $50, installation and testing costs $100, and $200 of oil and lubricants to be used with the machinery during its first year of operations. Windsor estimates that the useful life of the machine is 5 years with a $5,250 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used. Machine B: The recorded cost of this machine was $180,000. Windsor estimates that the useful life of the machine is 4 years with a $16,800 salvage value remaining at the end of that time period. (a) 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 0 for the amounts.) 1. The journal entry to record its purchase on January 1, 2022. 2. The journal entry to record annual depreciation at December 31, 2022.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On January 1, 2022, Windsor Company purchased the following two machines for use in its production process.
| Machine A: | The cash price of this machine was $43,500. Related expenditures also paid in cash included: sales tax $3,550, shipping costs $150, insurance during shipping $50, installation and testing costs $100, and $200 of oil and lubricants to be used with the machinery during its first year of operations. Windsor estimates that the useful life of the machine is 5 years with a $5,250 salvage value remaining at the end of that time period. Assume that the straight-line method of |
|
| Machine B: | The recorded cost of this machine was $180,000. Windsor estimates that the useful life of the machine is 4 years with a $16,800 salvage value remaining at the end of that time period. |
(a)
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 0 for the amounts.)
| 1. | The |
|
| 2. | The journal entry to record annual depreciation at December 31, 2022. |
Transcribed Image Text: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 journal entry to record its purchase on January 1, 2022.
2.
The journal entry to record annual depreciation at December 31, 2022.
No. Account Titles and Explanation
Debit
Credit
1.
2.
Transcribed Image Text:On January 1, 2022, Windsor Company purchased the following two machines for use in its production process.
The cash price of this machine was $43,500. Related expenditures also paid in cash included: sales tax $3,550,
shipping costs $150, insurance during shipping $50, installation and testing costs $100, and $200 of oil and
Machine A:
lubricants to be used with the machinery during its first year of operations. Windsor estimates that the useful life
of the machine is 5 years with a $5,250 salvage value remaining at the end of that time period. Assume that the
straight-line method of depreciation is used.
The recorded cost of this machine was $180,000. Windsor estimates that the useful life of the machine is 4 years
with a $16,800 salvage value remaining at the end of that time period.
Machine B:
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