FUNDAMENTAL ACCT PRIN TEXT+CONNECT CODE
15th Edition
ISBN: 9781265564483
Author: Wild
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
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.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Financial Accounting
The total manufacturing costs added during the period are?
Cash: 35000, Accounting receivable: 52000
Chapter 10 Solutions
FUNDAMENTAL ACCT PRIN TEXT+CONNECT CODE
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
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The actual cost of direct labor per hour is $16.25 and the standard cost of direct labor per hour is $15.00. The direct labor hours allowed per finished unit is 0.60 hours. During the current period, 4,500 units of finished goods were produced using 2,900 direct labor hours. How much is the direct labor rate variance? A. $3,625 favorable B. $3,625 unfavorable C. $4,350 favorable D. $4,350 unfavorablearrow_forwardWhat is the book value of its liability?arrow_forwardWhat is the dividend playout ratio for the year ?arrow_forward
- I need guidance with this general accounting problem using the right accounting principles.arrow_forwardPlease provide correct solution and accounting questionarrow_forwardA balance sheet shows cash, $75,000; marketable securities, $110,000; receivables, $90,000; and $225,000 of inventories. Current liabilities are $200,000. The current ratio is 1.375 to 1. a. True b. Falsearrow_forward
- What is the economic order quantity?arrow_forwardPLEASE help do thi correctlyarrow_forwardDuring FY 2005 Tenfold Manufacturinghad total manufacturing bycosts are $438,000. Their cost of goods manufactured for the year was $548,000. The January 1, 2006 balance of the Work-in-Process Inventory is $39,000. Use this information to determine the dollar amount of the FY 2005 beginning Work-in-Process Inventory.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
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