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Answer a, b, c P10-3B On January 1, 2012, Zakiuddin Company purchased the following two machines for use in its production process Machi The cash
Answer a, b, c
P10-3B On January 1, 2012, Zakiuddin Company purchased the following two machines for use in its production process Machi The cash price of this machine was $55,000. Related expenditures ne A:included: sales tax $2,750, shipping costs $100, insurance during shipping $75, installation and testing costs $75, and $90 of oil and lubricants to be used with the machinery during its first year of operation. Zakiuddin estimates that the useful life of the machine is 4 years with a $5,000 salvage value remaining at the end of that time period. The recorded cost of this machine was $100,000. Zakiuddin estimates that the useful life of the machine is 4 years with a $10,000 salvage value remaining at the end of that time period Machi ne B: Instructions (a)Prepare the following for Machine A 1. The journal entry to record its purchase on January 1, 2012. 2. The journal entry to record annual depreciation at December 31, 2012, assuming the straight-line method of depreciation is used. (b)Calculate the amount of depreciation expense that Zakiuddin should record for machine B each year of its useful life under the following assumption 1. Zakiuddin uses the straight-line method of depreciation 2. Zakiuddin uses the declining-balance method. The rate used is twice the straight-line rate. 3. Zakiuddin uses the units-of-activity method and estimates the useful life of the machine is 25,000 units. Actual usage is as follows: 2012, 5,500 units; 2013, 7,000 units; 2014, 8,000 units; 2015, 4,500 unitsStep by Step Solution
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