Question
at the beginning of the year, Grillo industries bought three used machines from freeman incorporated. the machines inmediatly wew overhauled, were installed and started operating.
at the beginning of the year, Grillo industries bought three used machines from freeman incorporated. the machines inmediatly wew overhauled, were installed and started operating. because the machines were different, each was recorded separately in the accounts.
machine A machine b machine c
cost of the assets 10600 39800 23600
installation cost 850 3700 2800
renovations cost prior used 650 3300 3800
repairs after production began 500 700 2300
by the end of this year, each machine had been operating 8000 hours
required
1. compute the cost of each machine
2. prepare the journal entry to record depreciation expense at the end of year 1, assuming the following.
machine life residual value depreciation method
a 5 years 2600 straight-line
b 20000 hours 2200 units-of-production
c 10 years 1400 double-declining-balance
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