Question
At the beginning of the year, Jorgenson Companies bought a shed, a machine, and a trailer. The shed initially cost $20,100 but had to be
At the beginning of the year, Jorgenson Companies bought a shed, a machine, and a trailer. The shed initially cost $20,100 but had to be renovated at a cost of $500. The shed was expected to last 7 years, with a residual value of $1,350. Repairs costing $320 were incurred at the end of the first year of use. The machine cost $11,150, and is estimated to have a total life of 40,000 hours and residual value of $900. The machine was actually used 2,000 hours in year 1 and 4,000 hours in year 2. The trailer cost $11,100 and was expected to last 4 years, with a residual value of $2,000. 3. Compute year 2 units-of-production depreciation expense for the machine. 4. Prepare the journal entry to record year 2 units-of-production depreciation expense for the machine.
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