Required information [The following information applies to the questions displayed below.] During the current year, Merkley 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: Asset Machine A Machine B Machine C Original Cost $ 39,000 41,000 75, 100 Residual Value $ 3,000 4,000 6,700 Estimated Life 10 years 8 years 17 years Accumulated Depreciation (straight line) $28,800 (8 years) 27,750 (6 years) 48,282 (12 years) The machines were disposed of during the current year in the following ways: a. Machine A: Sold on January 1 for $9,700 cash. b. Machine B: Sold on December 31 for $9,225; received cash, $2,500, and a $6,725 interest-bearing (12 percent) note receivable due at the end of 12 months. c. Machine C: On January 1, this machine suffered irreparable damage from an accident. On January 10, a salvage
Required information [The following information applies to the questions displayed below.] During the current year, Merkley 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: Asset Machine A Machine B Machine C Original Cost $ 39,000 41,000 75, 100 Residual Value $ 3,000 4,000 6,700 Estimated Life 10 years 8 years 17 years Accumulated Depreciation (straight line) $28,800 (8 years) 27,750 (6 years) 48,282 (12 years) The machines were disposed of during the current year in the following ways: a. Machine A: Sold on January 1 for $9,700 cash. b. Machine B: Sold on December 31 for $9,225; received cash, $2,500, and a $6,725 interest-bearing (12 percent) note receivable due at the end of 12 months. c. Machine C: On January 1, this machine suffered irreparable damage from an accident. On January 10, a salvage
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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.
Topic Video
Question
please dont provide answer in an image format thank you
Transcribed Image Text:The machines were disposed of during the current year in the following ways:
a. Machine A: Sold on January 1 for $9,700 cash.
b. Machine B: Sold on December 31 for $9,225; received cash, $2,500, and a $6,725 interest-bearing (12 percent) note
receivable due at the end of 12 months.
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:
. Give all journal entries related to the disposal of each machine in the current year.
3. Machine A.
D. Machine B.
. Machine C.
Complete the following questions by preparing worksheet and journal entries given below.
![Required information
[The following information applies to the questions displayed below.]
During the current year, Merkley 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:
Asset
Machine A
Machine B
Machine C
Original
Cost
$ 39,000
41,000
75, 100
Residual
Value
$ 3,000
4,000
6,700
Estimated
Life
10 years
8 years
17 years
Accumulated
Depreciation
(straight line)
$28,800 (8 years)
27,750 (6 years)
48,282 (12 years)
The machines were disposed of during the current year in the following ways:
a. Machine A: Sold on January 1 for $9,700 cash.
b. Machine B: Sold on December 31 for $9,225; received cash, $2,500, and a $6,725 interest-bearing (12 percent) note
receivable due at the end of 12 months.
c. Machine C: On January 1, this machine suffered irreparable damage from an accident. On January 10, a salvage](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F94509fc1-ed87-4c03-b211-1c62ccfffcaf%2F28326a59-8661-4e19-9a7d-3ebc9d13675f%2Fj3ilzpg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
During the current year, Merkley 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:
Asset
Machine A
Machine B
Machine C
Original
Cost
$ 39,000
41,000
75, 100
Residual
Value
$ 3,000
4,000
6,700
Estimated
Life
10 years
8 years
17 years
Accumulated
Depreciation
(straight line)
$28,800 (8 years)
27,750 (6 years)
48,282 (12 years)
The machines were disposed of during the current year in the following ways:
a. Machine A: Sold on January 1 for $9,700 cash.
b. Machine B: Sold on December 31 for $9,225; received cash, $2,500, and a $6,725 interest-bearing (12 percent) note
receivable due at the end of 12 months.
c. Machine C: On January 1, this machine suffered irreparable damage from an accident. On January 10, a salvage
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education