Loose Leaf for Fundamentals of Accounting Principles and Connect Access Card
Loose Leaf for Fundamentals of Accounting Principles and Connect Access Card
22nd Edition
ISBN: 9781259542169
Author: John J Wild
Publisher: McGraw-Hill Education
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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 exp…
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…
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Chapter 10, Problem 17E

Requirement-1:

To determine

To prepare: The journal entries to record the partial year depreciation and disposal of machine on July 1, 2019, if the machine is sold for $45,500 cash

Requirement-1:

Expert Solution
Check Mark

Answer to Problem 17E

Solution: The journal entries to record the partial year depreciation and disposal of machine are as follows:

    Journal entries
    Date Account titles Debit Credit
    Jul. 1, 2019
    		Depreciation Expense- Machine
    		 $ 7,500


    		Accumulated Depreciation- Machine

    		 $ 7,500




    Jul. 1, 2019
    		Cash
    		$ 45,500


    		Accumulated Depreciation- Machine
    		 $ 67,500


    		Gain on sale of Machine

    		 $ 8,000

    		Machine

    		 $ 105,000

Explanation of Solution

Explanation:



The journal entries to record the partial year depreciation and disposal of machine are explained as follows:

    Journal entries
    Date Account titles Debit Credit
    Jul. 1, 2019
    		Depreciation Expense- Machine
    		 $ 7,500


    		Accumulated Depreciation- Machine

    		 $ 7,500

    		(Being partial year depreciation recorded for the year 2019)






    Jul. 1, 2019
    		Cash
    		$ 45,500


    		Accumulated Depreciation- Machine
    		 $ 67,500


    		Gain on sale of Machine 45500-(105000-67500)

    		 $ 8,000

    		Machine

    		 $ 105,000
    (Being machine sold for cash)


Working note:

    Calculation of Straight line method depreciation:


    Cost (A)
    		 $ 105,000
    Salvage Value (B)
    		 $ -
    Life Years (C)
    		7
    Annual Straight Line Depreciation =(A-B)/C = $ 15,000


    Number of months asset used in the year 2019 (Jan. 1 to July 1, 2019 )
    		6
    Depreciation for the year 2019 = 15000*6/12 = $ 7,500
    Depreciation for first 4 years (2015 to 2018) = 15000*4 =
    		$ 60,000
    Accumulated depreciation balance as on July 1, 2019 = (60000+7500)=$ 67,500

Conclusion

Conclusion:

Hence, the journal entries are prepared to record the partial year depreciation and disposal of the machine.

Requirement-2:

To determine

To prepare: The journal entries to record the partial year depreciation and disposal of machine on July 1, 2019, if the machine is destroyed and insurance claim received is $25,000

Requirement-2:

Expert Solution
Check Mark

Answer to Problem 17E

Solution: The journal entries to record the partial year depreciation and disposal of machine are as follows:

    Journal entries
    Date Account titles Debit Credit
    Jul. 1, 2019
    		Depreciation Expense- Machine
    		 $ 7,500


    		Accumulated Depreciation- Machine

    		 $ 7,500




    Jul. 1, 2019
    		Cash
    		$ 25,000


    		Accumulated Depreciation- Machine
    		 $ 67,500


    		Loss on sale of Machine
    		 $ 12,500


    		Machine

    		 $ 105,000

Explanation of Solution

Explanation:



The journal entries to record the partial year depreciation and disposal of machine are explained as follows:

    Journal entries
    Date Account titles Debit Credit
    Jul. 1, 2019
    		Depreciation Expense- Machine
    		 $ 7,500


    		Accumulated Depreciation- Machine

    		 $ 7,500

    		(Being partial year depreciation recorded for the year 2019)






    Jul. 1, 2019
    		Cash
    		$ 25,000


    		Accumulated Depreciation- Machine
    		 $ 67,500


    		Loss on sale of Machine (105000-67500)-25,000
    		 $ 12,500


    		Machine

    		 $ 105,000
    (Being insurance claim received for machine destroyed in fire)


Working note:

    Calculation of Straight line method depreciation:


    Cost (A)
    		 $ 105,000
    Salvage Value (B)
    		 $ -
    Life Years (C)
    		7
    Annual Straight Line Depreciation =(A-B)/C = $ 15,000


    Number of months asset used in the year 2019 (Jan. 1 to July 1, 2019 )
    		6
    Depreciation for the year 2019 = 15000*6/12 = $ 7,500
    Depreciation for first 4 years (2015 to 2018) = 15000*4 =
    		$ 60,000
    Accumulated depreciation balance as on July 1, 2019 = (60000+7500)=$ 67,500

Conclusion

Conclusion:

Hence, the journal entries are prepared to record the partial year depreciation and disposal of the machine.

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Loose Leaf for Fundamentals of Accounting Principles and Connect Access Card

Ch. 10 - Prob. 1DQCh. 10 - Prob. 2DQCh. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - Prob. 5DQCh. 10 - Prob. 6DQCh. 10 - Prob. 7DQCh. 10 - Prob. 8DQCh. 10 - Prob. 9DQCh. 10 - Prob. 10DQ
Ch. 10 - Prob. 11DQCh. 10 - Prob. 12DQCh. 10 - Prob. 13DQCh. 10 - Prob. 14DQCh. 10 - Prob. 15DQCh. 10 - Prob. 16DQCh. 10 - Prob. 17DQCh. 10 - Prob. 18DQCh. 10 - Prob. 19DQCh. 10 - Prob. 20DQCh. 10 - Prob. 21DQCh. 10 - Prob. 1QSCh. 10 - Prob. 2QSCh. 10 - On January 2,2015. the Matthews Band acquires...Ch. 10 - Units-of-production On January 2,2015. the...Ch. 10 - Prob. 5QSCh. 10 - Prob. 6QSCh. 10 - Prob. 7QSCh. 10 - Prob. 8QSCh. 10 - Prob. 9QSCh. 10 - Prob. 10QSCh. 10 - Prob. 11QSCh. 10 - Prob. 12QSCh. 10 - Prob. 13QSCh. 10 - Prob. 14QSCh. 10 - Prob. 15QSCh. 10 - Prob. 1ECh. 10 - Prob. 2ECh. 10 - Prob. 3ECh. 10 - Prob. 4ECh. 10 - Exercise 10-5 Units-of-production depreciation P1...Ch. 10 - Exercise 10-6 Double-declining-balance...Ch. 10 - Prob. 7ECh. 10 - Exercise 10-8 Double-declining-balance...Ch. 10 - Prob. 9ECh. 10 - Exercise 10-10 Double-declining-balance...Ch. 10 - Prob. 11ECh. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Prob. 14ECh. 10 - Prob. 15ECh. 10 - Prob. 16ECh. 10 - Prob. 17ECh. 10 - Prob. 18ECh. 10 - Prob. 19ECh. 10 - Prob. 20ECh. 10 - Prob. 21ECh. 10 - Prob. 22ECh. 10 - Prob. 23ECh. 10 - Prob. 24ECh. 10 - Prob. 25ECh. 10 - Prob. 1APSACh. 10 - Problem 1O-2A Depreciation methods P1 A machine...Ch. 10 - Prob. 3APSACh. 10 - Prob. 4APSACh. 10 - Prob. 5APSACh. 10 - Prob. 6APSACh. 10 - Problem 1O7A Natural resources P3 On July 23 of...Ch. 10 - Prob. 8APSACh. 10 - Prob. 1BPSBCh. 10 - Problem 10-28 Depreciation methods P1 On January...Ch. 10 - Prob. 3BPSBCh. 10 - Prob. 4BPSBCh. 10 - Prob. 5BPSBCh. 10 - Problem 1O-6B Disposal of plant assets C1 P1 P2 On...Ch. 10 - Problem 10-78 Natural resources P3 On February 19...Ch. 10 - Prob. 8BPSBCh. 10 - Prob. 10SPCh. 10 - Refer to the financial statements of Apple in...Ch. 10 - Prob. 2BTNCh. 10 - Prob. 3BTNCh. 10 - Prob. 4BTNCh. 10 - Prob. 5BTNCh. 10 - Each ream member is to become an expert on one...Ch. 10 - Prob. 7BTNCh. 10 - Prob. 8BTNCh. 10 - Prob. 9BTN
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Accounting for Derivatives_1.mp4; Author: DVRamanaXIMB;https://www.youtube.com/watch?v=kZky1jIiCN0;License: Standard Youtube License
Depreciation|(Concept and Methods); Author: easyCBSE commerce lectures;https://www.youtube.com/watch?v=w4lScJke6CA;License: Standard YouTube License, CC-BY