Exercise 10-24

On December 31, 2017, Oriole Inc. has a machine with a book value of $1,297,200. The original cost and related accumulated depreciation at this date are as follows.

Machine		$1,794,000
Less: Accumulated depreciation		496,800
Book value		$1,297,200

Depreciation is computed at $82,800 per year on a straight-line basis. Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record the transaction. Make sure that depreciation entries are made to update the book value of the machine prior to its disposal.

A fire completely destroys the machine on August 31, 2018. An insurance settlement of $593,400 was received for this casualty. Assume the settlement was received immediately. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
August 31, 2018
	(to record current depreciation)
August 31, 2018
	(to record loss of the machine)

On April 1, 2018, Oriole sold the machine for $1,435,200 to Dwight Yoakam Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
April 1, 2018
	(to record current depreciation)
April 1, 2018
	(to record sale of the machine)

On July 31, 2018, the company donated this machine to the Mountain King City Council. The fair value of the machine at the time of the donation was estimated to be $1,518,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
July 31, 2018
	(to record current depreciation)
July 31, 2018
	(to record donation of the machine)

ATtached is a list of accounts

Accounts Payable Accumulated Depreciation-Building Accumulated Depreciation-Equipment Accumulated Depreciation-Machinery Accumulated Depreciation-Trucks Buildings Cash Common Stock Contribution Expense Contribution Revenue Cost of Goods Sold Depreciation Expense Direct Labor Discount on Notes Payable Equipment Factory Overhead Gain on Disposal of Buildings Gain on Disposal of Equipment Gain on Disposal of Machinery Gain on Disposal of Trucks Gain on Disposal of Plant Assets Insurance Expense Interest Expense Interest Payable Interest Revenue Inventory Land Land Improvements Loss on Disposal of Buildings Loss on Disposal of Equipment Loss on Disposal of Machinery Loss on Disposal of Trucks Machinery Maintenance and Repairs Expense Materials No Entry Notes Payable Organization Expense Paid-in Capital in Excess of Par - Common Stock Prepaid Insurance Retained Earnings Salaries and Wages Expense Sales Revenue Trading Securities Trucks