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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Chapter 10, Problem 17E
Requirement-1:
To determine
To prepare: The
Requirement-1:
Expert Solution
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 | |
| $ 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 | |
| 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
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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Chapter 10 Solutions
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