Marvel purchased assembly equipment for ($ 700,000) on January 1, 2011. Marvel's financial condition immediately prior to
Question:
Marvel purchased assembly equipment for \(\$ 700,000\) on January 1, 2011. Marvel's financial condition immediately prior to the purchase is shown in the following horizontal statements model:
The equipment is expected to have a useful life of 100,000 machine hours and a salvage value of \(\$ 20,000\). Actual machine-hour use was as follows:
Required
a. Compute the depreciation for each of the five years, assuming the use of units-of-production depreciation.
b. Assume that Marvel earns \(\$ 320,000\) of cash revenue during 2011. Record the purchase of the equipment and the recognition of the revenue and the depreciation expense for the first year in a financial statements model like the preceding one.
c. Assume that Marvel sold the equipment at the end of the fifth year for \(\$ 18,000\). Record the general journal entry for the sale.
Step by Step Answer:
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