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: Asset Machine A Machine B Machine C Original Cost Residual Value Estimated Life 10 years 10 years 17 years $21,000 130,000 75,700 $3,000 15,600 5,300 Accumulated Depreciation (straight line) $14,400 (8 years) 91,520 (8 years) 49,694 (12 years) The machines were disposed of during the current year in the following ways: a. Machine A: Sold on January 1 for $6,000 cash. b. Machine B: Sold on December 31 for $50,040; received cash, $40,032, and an $10,008 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 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: Asset Machine A Machine B Machine C Original Cost Residual Value Estimated Life 10 years 10 years 17 years $21,000 130,000 75,700 $3,000 15,600 5,300 Accumulated Depreciation (straight line) $14,400 (8 years) 91,520 (8 years) 49,694 (12 years) The machines were disposed of during the current year in the following ways: a. Machine A: Sold on January 1 for $6,000 cash. b. Machine B: Sold on December 31 for $50,040; received cash, $40,032, and an $10,008 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.
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:
Asset
Machine A
Machine B
Machine C
Original Cost Residual Value Estimated Life
10 years
10 years
17 years
$21,000
130,000
75,700
$3,000
15,600
5,300
Accumulated Depreciation
(straight line)
$14,400 (8 years)
91,520 (8 years)
49,694 (12 years)
The machines were disposed of during the current year in the following ways:
a. Machine A: Sold on January 1 for $6,000 cash.
b. Machine B: Sold on December 31 for $50,040; received cash, $40,032, and an $10,008 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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F94509fc1-ed87-4c03-b211-1c62ccfffcaf%2Fba50737a-0081-4dd5-b738-3df8bc0a812b%2Fkd1kpad_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:
Asset
Machine A
Machine B
Machine C
Original Cost Residual Value Estimated Life
10 years
10 years
17 years
$21,000
130,000
75,700
$3,000
15,600
5,300
Accumulated Depreciation
(straight line)
$14,400 (8 years)
91,520 (8 years)
49,694 (12 years)
The machines were disposed of during the current year in the following ways:
a. Machine A: Sold on January 1 for $6,000 cash.
b. Machine B: Sold on December 31 for $50,040; received cash, $40,032, and an $10,008 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.
Transcribed Image Text: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.
View transaction list
Journal entry worksheet
1
2
Record the depreciation of Machine A.
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