Required information [The following information applies to the questions displayed below.] During 2015, Merkley Company disposed of three different assets. On January 1, 2015, prior to their disposal, the accounts reflected the following: Accumulated Depreciation Original Residual Estimated Cost Value Asset Life (straight line) 26,400 (8 years) Machine $36,000 $ 3,000 10 years $ A Machine 45,000 4,000 30,750 (6 years) 8 years B Machine 75,500 6,700 51,600 (12 years) 16 years C The machines were disposed of in the following ways: a. Machine A: Sold on January 1, 2015, for $9,000 cash. b. Machine B: Sold on December 31, 2015, for $9,725; received cash, $2,300, and a $7,425 interest-bearing (12 percent) note receivable due at the end of 12 months. c. Machine C: On January 1, 2015, this machine suffered irreparable damage from an accident. On January 10, 2015, a salvage company removed the machine at no cost.
Required information [The following information applies to the questions displayed below.] During 2015, Merkley Company disposed of three different assets. On January 1, 2015, prior to their disposal, the accounts reflected the following: Accumulated Depreciation Original Residual Estimated Cost Value Asset Life (straight line) 26,400 (8 years) Machine $36,000 $ 3,000 10 years $ A Machine 45,000 4,000 30,750 (6 years) 8 years B Machine 75,500 6,700 51,600 (12 years) 16 years C The machines were disposed of in the following ways: a. Machine A: Sold on January 1, 2015, for $9,000 cash. b. Machine B: Sold on December 31, 2015, for $9,725; received cash, $2,300, and a $7,425 interest-bearing (12 percent) note receivable due at the end of 12 months. c. Machine C: On January 1, 2015, this machine suffered irreparable damage from an accident. On January 10, 2015, a salvage company removed the machine at no cost.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Record the
![Required information
[The following information applies to the questions displayed below.]
During 2015, Merkley Company disposed of three different assets. On January 1, 2015,
prior to their disposal, the accounts reflected the following:
Accumulated
Depreciation
Life
Asset
Machine
Original Residual Estimated
Cost Value
36,000 3,000
$
(straight line)
26,400 (8 years)
$
10 years
$
Machine
45,000 4,000
30,750 (6 years)
8 years
Machine
75,500 6,700
51,600 (12 years)
16 years
C
The machines were disposed of in the following ways:
a. Machine A: Sold on January 1, 2015, for $9,000 cash.
b. Machine B: Sold on December 31, 2015, for $9,725; received cash, $2,300, and a
$7,425 interest-bearing (12 percent) note receivable due at the end of 12 months.
c. Machine C: On January 1, 2015, this machine suffered irreparable damage from an
accident. On January 10, 2015, a salvage company removed the machine at no cost.
A
B](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4f5a5f83-864f-43d6-91b5-098f162e7ade%2Fffa9943c-a08f-48af-b79a-597ee0cbcc70%2Fcy84bh_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
During 2015, Merkley Company disposed of three different assets. On January 1, 2015,
prior to their disposal, the accounts reflected the following:
Accumulated
Depreciation
Life
Asset
Machine
Original Residual Estimated
Cost Value
36,000 3,000
$
(straight line)
26,400 (8 years)
$
10 years
$
Machine
45,000 4,000
30,750 (6 years)
8 years
Machine
75,500 6,700
51,600 (12 years)
16 years
C
The machines were disposed of in the following ways:
a. Machine A: Sold on January 1, 2015, for $9,000 cash.
b. Machine B: Sold on December 31, 2015, for $9,725; received cash, $2,300, and a
$7,425 interest-bearing (12 percent) note receivable due at the end of 12 months.
c. Machine C: On January 1, 2015, this machine suffered irreparable damage from an
accident. On January 10, 2015, a salvage company removed the machine at no cost.
A
B
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