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 Residual Value Cost $36,000 69,000 76,500 $ 3,000 4,000 5,600 Machine A. Machine B. Machine C. Estimated Life 12 years 8 years 17 years Accumulated Depreciation (straight line) $27,500 (10 years) 48,750 (6 years) 50,047 (12 years). The machines were disposed of during the current year in the following ways: a. Machine A: Sold on January 1 for $8,000 cash. b. Machine B: Sold on December 31 for $12,925; received cash, $2,200, and a $10,725 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. equired: Give all journal entries related to the disposal of each machine in the current year.
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 Residual Value Cost $36,000 69,000 76,500 $ 3,000 4,000 5,600 Machine A. Machine B. Machine C. Estimated Life 12 years 8 years 17 years Accumulated Depreciation (straight line) $27,500 (10 years) 48,750 (6 years) 50,047 (12 years). The machines were disposed of during the current year in the following ways: a. Machine A: Sold on January 1 for $8,000 cash. b. Machine B: Sold on December 31 for $12,925; received cash, $2,200, and a $10,725 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. equired: Give all journal entries related to the disposal of each machine in the current year.
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, 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
$ 36,000
69,000
76,500
Residual
Value
$ 3,000
4,000
5,600
Estimated
Life
Machine A.
Machine B.
Machine C.
12 years
8 years
17 years
Accumulated
Depreciation
(straight line)
$27,500 (10 years)
48,750 (6 years)
50,047 (12 years)
The machines were disposed of during the current year in the following ways:
a. Machine A: Sold on January 1 for $8,000 cash.
b. Machine B: Sold on December 31 for $12,925; received cash, $2,200, and a $10,725 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.
equired:
Give all journal entries related to the disposal of each machine in the current year.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F74ae14f1-b537-4f7c-b8e1-90acd05dee6f%2F7981ffe8-d368-44a0-8d32-e896e3d98157%2Funb1u5_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
$ 36,000
69,000
76,500
Residual
Value
$ 3,000
4,000
5,600
Estimated
Life
Machine A.
Machine B.
Machine C.
12 years
8 years
17 years
Accumulated
Depreciation
(straight line)
$27,500 (10 years)
48,750 (6 years)
50,047 (12 years)
The machines were disposed of during the current year in the following ways:
a. Machine A: Sold on January 1 for $8,000 cash.
b. Machine B: Sold on December 31 for $12,925; received cash, $2,200, and a $10,725 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.
equired:
Give all journal entries related to the disposal of each machine in the current year.
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