Required information [The following information applies to the questions displayed below.] During the current year, Yost Company disposed of three different assets. On January 1 of the current year, prior to th disposal of the assets, the accounts reflected the following: Asset Machine A Machine B Machine C Original Cost Residual Value $24,000 $3,000 110,000 13,200 75,300 6,300 Estimated Life 8 years 10 years 16 years Accumulated Depreciation (straight line) $15,750 (6 years) 77,440 (8 years) 51,750 (12 years)
Required information [The following information applies to the questions displayed below.] During the current year, Yost Company disposed of three different assets. On January 1 of the current year, prior to th disposal of the assets, the accounts reflected the following: Asset Machine A Machine B Machine C Original Cost Residual Value $24,000 $3,000 110,000 13,200 75,300 6,300 Estimated Life 8 years 10 years 16 years Accumulated Depreciation (straight line) $15,750 (6 years) 77,440 (8 years) 51,750 (12 years)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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![Required information
[The following information applies to the questions displayed below.]
During the current year, Yost Company disposed of three different assets. On January 1 of the current year, prior to the
disposal of the assets, the accounts reflected the following:
Original Cost Residual Value
Asset
Machine A
$24,000
$3,000
Estimated Life
8 years
10 years
Machine B
13,200
110,000
75,300
Machine C
6,300
16 years
The machines were disposed of during the current year in the following ways:
a. Machine A: Sold on January 1 for $7,950 cash.
b. Machine B: Sold on December 31 for $47,880; received cash, $38,304, and an $9,576 interest-bearing (12 percent) note
receivable due at the end of 12 months.
Accumulated Depreciation
(straight line)
$15,750 (6 years)
77,440 (8 years)
51,750 (12 years)
c. Machine C: On January 1, this machine suffered irreparable damage from an accident. On January 10, a salvage
company removed the machine at no cost.
Required:
1. Give all journal entries related to the disposal of each machine in the current year.
a. Machine A.
b. Machine B.
c. Machine C.
Complete the following questions by preparing worksheet and journal entries given below.
Required A Required B Required C
Give all journal entries related to the disposal of Machine A in the current year.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcb78f270-b29f-4df2-98c8-b80bb2ba3130%2F200512c9-ba1e-4d13-97dd-ed5209ba57d5%2Ft17ppr_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
During the current year, Yost Company disposed of three different assets. On January 1 of the current year, prior to the
disposal of the assets, the accounts reflected the following:
Original Cost Residual Value
Asset
Machine A
$24,000
$3,000
Estimated Life
8 years
10 years
Machine B
13,200
110,000
75,300
Machine C
6,300
16 years
The machines were disposed of during the current year in the following ways:
a. Machine A: Sold on January 1 for $7,950 cash.
b. Machine B: Sold on December 31 for $47,880; received cash, $38,304, and an $9,576 interest-bearing (12 percent) note
receivable due at the end of 12 months.
Accumulated Depreciation
(straight line)
$15,750 (6 years)
77,440 (8 years)
51,750 (12 years)
c. Machine C: On January 1, this machine suffered irreparable damage from an accident. On January 10, a salvage
company removed the machine at no cost.
Required:
1. Give all journal entries related to the disposal of each machine in the current year.
a. Machine A.
b. Machine B.
c. Machine C.
Complete the following questions by preparing worksheet and journal entries given below.
Required A Required B Required C
Give all journal entries related to the disposal of Machine A in the current year.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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