BUS4060 u08a2 Template Problem 8-6B

Fill out the template please with the question below.

Jan. 1
Jan. 2
Jan. 4

2. a. First year

Dec. 31

b. Sixth year

Dec. 31

3. Accumulated depreciation at the date of disposal

Book value at the date of disposal

a. Sold for $28,000 cash

Dec. 31

b. Sold for $52,000 cash

Dec. 31

c. Destroyed in fire and collected $25,000 cash from insurance

Dec. 31

Disposal of plant assets C1 P1 P2 On January 1, Walker purchased a used machine for $150,000. On January 4, Walker paid $3,510 to wire electricity to the machine. Walker paid an additional $4,600 on January 5 to secure the machine for operation. The machine will be used for seven years and have an $18,110 salvage value. Straight-line depreciation is used. On December 31 , at the end of its sixth year of use, the machine is disposed of. Required 1. Prepare journal entries to record the machine's purchase and the costs to ready it for use. Cash is paid for all costs incurred. 2. Prepare journal entries to record depreciation of the machine at December 31 of (a) its first year of operations and (b) the year of its disposal. Check (2b) Depr: Exp., $20,000 3. Prepare journal entries to record the machine's disposal under each separate situation: (a) it is sold for $28,000 cash and (b) it is sold for $52,000 cash