The following transactions occurred during 2025. Assume that depreciation of 10% per year is charged on all machinery and 5% per year on buildings, on a straight-line basis, with no estimated salvage value. Depreciation is charged for a full year on all fixed assets acquired during the year, and no depreciation is charged on fixed assets disposed of during the year.- **Jan. 30**: A building that cost $137,280 in 2008 is torn down to make room for a new building. The wrecking contractor was paid $5,304 and was permitted to keep all materials salvaged.- **Mar. 10**: Machinery that was purchased in 2018 for $16,640 is sold for $3,016 cash, f.o.b. purchaser’s plant. Freight of $312 is paid on the sale of this machinery.- **Mar. 20**: A gear breaks on a machine that cost $9,360 in 2017. The gear is replaced at a cost of $2,080. The replacement does not extend the useful life of the machine but does make the machine more efficient.- **May 18**: A special base installed for a machine in 2019 when the machine was purchased has to be replaced at a cost of $5,720 because of defective workmanship on the original base. The cost of the machinery was $14,768 in 2019. The cost of the base was $3,640, and this amount was charged to the Machinery account in 2019.- **June 23**: One of the buildings is repainted at a cost of $7,176. It had not been painted since it was constructed in 2021.Prepare general journal entries for the transactions. *(Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries.)*| Date | Account Titles and Explanation | Debit | Credit ||------------|--------------------------------|-------|--------|| | | | || | | | || | | | || | | | || | | | || | | |

Journal entry is a primary entry that records the financial transactions initially. The transactions are then posted to the ledger of each account. Journal entry:

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The following transactions occurred during 2025. Assume that depreciation of 10% per year is charged or year on buildings, on a straight-line basis, with no estimated salvage value. Depreciation is charged for a fr acquired during the year, and no depreciation is charged on fixed assets disposed of during the year.

The following transactions occurred during 2025. Assume that depreciation of 10% per year is charged or year on buildings, on a straight-line basis, with no estimated salvage value. Depreciation is charged for a fr acquired during the year, and no depreciation is charged on fixed assets disposed of during the year.

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

The following transactions occurred during 2025. Assume that depreciation of 10% per year is charged on all machinery and 5% per year on buildings, on a straight-line basis, with no estimated salvage value. Depreciation is charged for a full year on all fixed assets acquired during the year, and no depreciation is charged on fixed assets disposed of during the year.

- **Jan. 30**: A building that cost $137,280 in 2008 is torn down to make room for a new building. The wrecking contractor was paid $5,304 and was permitted to keep all materials salvaged.

- **Mar. 10**: Machinery that was purchased in 2018 for $16,640 is sold for $3,016 cash, f.o.b. purchaser’s plant. Freight of $312 is paid on the sale of this machinery.

- **Mar. 20**: A gear breaks on a machine that cost $9,360 in 2017. The gear is replaced at a cost of $2,080. The replacement does not extend the useful life of the machine but does make the machine more efficient.

- **May 18**: A special base installed for a machine in 2019 when the machine was purchased has to be replaced at a cost of $5,720 because of defective workmanship on the original base. The cost of the machinery was $14,768 in 2019. The cost of the base was $3,640, and this amount was charged to the Machinery account in 2019.

- **June 23**: One of the buildings is repainted at a cost of $7,176. It had not been painted since it was constructed in 2021.

Prepare general journal entries for the transactions. *(Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries.)*

| Date | Account Titles and Explanation | Debit | Credit |
|------------|--------------------------------|-------|--------|
| | | | |
| | | | |
| | | | |
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