The following data relate to the Machinery account of Metlock, Inc. at December 31, 2025. Machinery A B C D Original cost $50,600 $56,100 $88,000 $88,000 Year purchased 2020 2021 2022 2024 Useful life 10 years 15,000 hours 15 years 10 years Salvage value $3,410 $3,300 $5,500 $5,500 Depreciation method Sum-of-the-years-digits Activity Straight-line Double-declining balance Accum. depr. through 2025* $34,320 $38,720 $16,500 $17,600 "In the year an asset is purchased, Metlock, Inc. does not record any depreciation expense on the asset. In the year an asset is retired or traded in, Metlock, Inc. takes a full year's depreciation on the asset. The following transactions occurred during 2026. a. On May 5, Machine A was sold for $14,300 cash. The company's bookkeeper recorded this retirement in the following manner in the cash receipts journal. Cash Machinery (Machine A) 14,300 14,300 b. On December 31, it was determined that Machine B had been used 2,350 hours during 2026. c. On December 31, before computing depreciation expense on Machine C, the management of Metlock, Inc. decided the useful life remaining from January 1, 2026, was 10 years. d. On December 31, it was discovered that a machine purchased in 2025 had been expensed completely in that year. This machine cost $30,800 and has a useful life of 10 years and no salvage value. Management has decided to use the double-declining- balance method for this machine, which can be referred to as "Machine E." Prepare the necessary correcting entries for the year 2026. Record the appropriate depreciation expense on the above-mentioned machines. No entry is necessary for Machine D. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round intermediate calculations to 3 decimal places, e.g. 4.589 and final answers to O decimal places, e.g. 45,892. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) No. Account Titles and Explanation a. Debit Credit automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) No. Account Titles and Explanation a. (To record current depreciation) b. (To properly record the sale) C. d. (To correct the incorrect expensing of the asset in 2025) (To record depreciation) Debit Credit

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
The following data relate to the Machinery account of Metlock, Inc. at December 31, 2025.
Machinery
A
B
C
D
Original cost
$50,600
$56,100
$88,000
$88,000
Year purchased
2020
2021
2022
2024
Useful life
10 years
15,000 hours
15 years
10 years
Salvage value
$3,410
$3,300
$5,500
$5,500
Depreciation method
Sum-of-the-years-digits
Activity
Straight-line
Double-declining balance
Accum. depr. through 2025*
$34,320
$38,720
$16,500
$17,600
"In the year an asset is purchased, Metlock, Inc. does not record any depreciation expense on the asset. In the year an asset is retired or
traded in, Metlock, Inc. takes a full year's depreciation on the asset.
The following transactions occurred during 2026.
a. On May 5, Machine A was sold for $14,300 cash. The company's bookkeeper recorded this retirement in the following manner in
the cash receipts journal.
Cash
Machinery (Machine A)
14,300
14,300
b. On December 31, it was determined that Machine B had been used 2,350 hours during 2026.
c. On December 31, before computing depreciation expense on Machine C, the management of Metlock, Inc. decided the useful
life remaining from January 1, 2026, was 10 years.
d. On December 31, it was discovered that a machine purchased in 2025 had been expensed completely in that year. This machine
cost $30,800 and has a useful life of 10 years and no salvage value. Management has decided to use the double-declining-
balance method for this machine, which can be referred to as "Machine E."
Prepare the necessary correcting entries for the year 2026. Record the appropriate depreciation expense on the above-mentioned
machines. No entry is necessary for Machine D. (If no entry is required, select "No entry" for the account titles and enter O for the amounts.
Round intermediate calculations to 3 decimal places, e.g. 4.589 and final answers to O decimal places, e.g. 45,892. Credit account titles are
automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.)
No. Account Titles and Explanation
a.
Debit
Credit
Transcribed Image Text:The following data relate to the Machinery account of Metlock, Inc. at December 31, 2025. Machinery A B C D Original cost $50,600 $56,100 $88,000 $88,000 Year purchased 2020 2021 2022 2024 Useful life 10 years 15,000 hours 15 years 10 years Salvage value $3,410 $3,300 $5,500 $5,500 Depreciation method Sum-of-the-years-digits Activity Straight-line Double-declining balance Accum. depr. through 2025* $34,320 $38,720 $16,500 $17,600 "In the year an asset is purchased, Metlock, Inc. does not record any depreciation expense on the asset. In the year an asset is retired or traded in, Metlock, Inc. takes a full year's depreciation on the asset. The following transactions occurred during 2026. a. On May 5, Machine A was sold for $14,300 cash. The company's bookkeeper recorded this retirement in the following manner in the cash receipts journal. Cash Machinery (Machine A) 14,300 14,300 b. On December 31, it was determined that Machine B had been used 2,350 hours during 2026. c. On December 31, before computing depreciation expense on Machine C, the management of Metlock, Inc. decided the useful life remaining from January 1, 2026, was 10 years. d. On December 31, it was discovered that a machine purchased in 2025 had been expensed completely in that year. This machine cost $30,800 and has a useful life of 10 years and no salvage value. Management has decided to use the double-declining- balance method for this machine, which can be referred to as "Machine E." Prepare the necessary correcting entries for the year 2026. Record the appropriate depreciation expense on the above-mentioned machines. No entry is necessary for Machine D. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round intermediate calculations to 3 decimal places, e.g. 4.589 and final answers to O decimal places, e.g. 45,892. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) No. Account Titles and Explanation a. Debit Credit
automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.)
No. Account Titles and Explanation
a.
(To record current depreciation)
b.
(To properly record the sale)
C.
d.
(To correct the incorrect expensing of the asset in 2025)
(To record depreciation)
Debit
Credit
Transcribed Image Text:automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) No. Account Titles and Explanation a. (To record current depreciation) b. (To properly record the sale) C. d. (To correct the incorrect expensing of the asset in 2025) (To record depreciation) Debit Credit
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 1 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education