Rahman Company, a manufacturer of steel products, began operations on January 1, 2020. Rahman has a December 31 fiscal year-end and adjusts its accounts annually. Selected transactions related to its Brampton plant are as follows: Jan. 1, 2020 Paid cash for six (6) stamping machines for a total price of $15,300 plus delivery costs of $200 per unit Dec. 31, 2020 Recorded depreciation at year end. Assume that the stamping machines have a 5 year useful life and a residual (salvage) value of 10% of the original cost. Dec. 31, 2021 Recorded depreciation at year end. Jan. 1, 2022 One (1) stamping machine was sold for $1,250. . Dec. 31, 2022 Exchanged one (1) stamping machine for a welding machine. The list price of the welding machine was $8,000 and Rahman received a trade-in allowance for the stamping machine of $2,000 (remainder paid in cash). A new welding machine could be bought (without a trade-in) for $7,500. The fair market value of the stamping machine was $1,000. Instructions: Prepare all the necessary journal entries for the above transactions of Rahman Company. Assume that Rahman Company uses straight-line depreciation.
Rahman Company, a manufacturer of steel products, began operations on January 1, 2020. Rahman has a December 31 fiscal year-end and adjusts its accounts annually. Selected transactions related to its Brampton plant are as follows: Jan. 1, 2020 Paid cash for six (6) stamping machines for a total price of $15,300 plus delivery costs of $200 per unit Dec. 31, 2020 Recorded depreciation at year end. Assume that the stamping machines have a 5 year useful life and a residual (salvage) value of 10% of the original cost. Dec. 31, 2021 Recorded depreciation at year end. Jan. 1, 2022 One (1) stamping machine was sold for $1,250. . Dec. 31, 2022 Exchanged one (1) stamping machine for a welding machine. The list price of the welding machine was $8,000 and Rahman received a trade-in allowance for the stamping machine of $2,000 (remainder paid in cash). A new welding machine could be bought (without a trade-in) for $7,500. The fair market value of the stamping machine was $1,000. Instructions: Prepare all the necessary journal entries for the above transactions of Rahman Company. Assume that Rahman Company uses straight-line depreciation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Rahman Company, a manufacturer of steel products, began operations on January 1, 2020.
Rahman has a December 31 fiscal year-end and adjusts its accounts annually.
Selected transactions related to its Brampton plant are as follows:
- Jan. 1, 2020 Paid cash for six (6) stamping machines for a total price of $15,300 plus delivery costs of $200 per unit
-
Dec. 31, 2020 Recorded
depreciation at year end. Assume that the stamping machines have a 5 year useful life and a residual (salvage) value of 10% of the original cost. - Dec. 31, 2021 Recorded depreciation at year end.
- Jan. 1, 2022 One (1) stamping machine was sold for $1,250.
-
. Dec. 31, 2022 Exchanged one (1) stamping machine for a welding machine. The list price of the welding machine was $8,000 and Rahman received a trade-in allowance for the stamping machine of $2,000 (remainder paid in cash). A new welding machine could be bought (without a trade-in) for $7,500. The fair market value of the stamping machine was $1,000.
Instructions:
Prepare all the necessary
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