On March 20, 2020, Fine Touch Corporation purchased two machines at auction for a combined total cost of $202.000. The machines were listed in the auction catalogue at $110,000 for machine X and $155,000 for machine Y. Immediately after the auction, Fine Touch had the machines professionally appraised so it could increase its insurance coverage. The appraisal put a fair value of $106.650 on machine X and $130,350 on machine Y. On March 24, FineTouch paid a total of $5000 in transportation and installation charges for the two machines. No further expenditures were made for machine X. but $6,700 was paid on March 29 for improvements to machine Y. On March 31, 2020, both machines were ready to be used. The company expects machine X to last five years and to have a residual value of $3,000 when it is removed from service, and it expects machine Y to be useful for eight more years and have a residual value of $14.950 at that time. Due to the different characteristics of the two machines, different depreciation methods will be used for them: machine Xwill be depreciated using the double-diminishing-balance method and machine Y using the straight-line method. Prepare the journal entry to record the purchase of the machines, indicating the initial cost of each. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round percentage to 1 decimal place, for eg 40.1 and Round answers to the nearest whole dollar, eg. 5,275. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit Mar. 20 MachineryX Machinery Y Cah
On March 20, 2020, Fine Touch Corporation purchased two machines at auction for a combined total cost of $202.000. The machines were listed in the auction catalogue at $110,000 for machine X and $155,000 for machine Y. Immediately after the auction, Fine Touch had the machines professionally appraised so it could increase its insurance coverage. The appraisal put a fair value of $106.650 on machine X and $130,350 on machine Y. On March 24, FineTouch paid a total of $5000 in transportation and installation charges for the two machines. No further expenditures were made for machine X. but $6,700 was paid on March 29 for improvements to machine Y. On March 31, 2020, both machines were ready to be used. The company expects machine X to last five years and to have a residual value of $3,000 when it is removed from service, and it expects machine Y to be useful for eight more years and have a residual value of $14.950 at that time. Due to the different characteristics of the two machines, different depreciation methods will be used for them: machine Xwill be depreciated using the double-diminishing-balance method and machine Y using the straight-line method. Prepare the journal entry to record the purchase of the machines, indicating the initial cost of each. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round percentage to 1 decimal place, for eg 40.1 and Round answers to the nearest whole dollar, eg. 5,275. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit Mar. 20 MachineryX Machinery Y Cah
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Prepare the journal entry to record the depreciation expense to December 31, 2020, for each machine. (Credit account titles are
automatically indented when the amount is entered. Do not indent manually. Round answers to the nearest whole dollar, eg 5,275. If no
entry is required, select "No Entry" for the account titles and enter O for the amounts.)
Date Account Titles and Explanation
Debit
Credit
Dec. 31
dep
eTextbook and Media
List of Accounts
Transcribed Image Text:On March 20, 2020, FineTouch Corporation purchased two machines at auction for a combined total cost of $202.000. The machines
were listed in the auction catalogue at $110,000 for machine X and $155,000 for machine Y. Immediately after the auction, Fine Touch
had the machines professionally appraised so it could increase its insurance coverage. The appraisal put a fair value of $106.650 on
machine X and $130,350 on machine Y.
On March 24, FineTouch paid a total of $5.000 in transportation and installation charges for the two machines. No further
expenditures were made for machine X. but $6,700 was paid on March 29 for improvements to machine Y. On March 31,2020, both
machines were ready to be used.
The company expects machine X to last five years and to have a residual value of $3.000 when it is removed from service, and it
expects machine Y to be useful for eight more years and have a residual value of $14.950 at that time. Due to the different
characteristics of the two machines, different depreciation methods will be used for them: machine Xwill be depreciated using the
double-diminishing-balance method and machine Y using the straight-line method.
Prepare the journal entry to record the purchase of the machines, indicating the initial cost of each, (Credit account titles are
automatically indented when the amount is entered. Do not indent manually. Round percentage to 1 decimal place, for eg. 40.1 and Round
answers to the nearest whole dollar, eg. 5,275. If no entry is required, select "No Entry for the account titles and enter O for the amounts.)
Date
Account Titles and Explanation
Debit
Credit
Mar. 20
Michinery X
Machinery Y
Cash
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