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Facts: Machine is purchased at a cost of $45,000 with a residual value of $9,000. The useful life is 6 years and the company uses
Facts: Machine is purchased at a cost of $45,000 with a residual value of $9,000. The useful life is 6 years and the company uses straight line deprecation. a) Make the journal entry to record the purchase of the machine for cash: b) Make the journal entry to record depreciation for year 1: c) Make the journal entry to record the sale of the machine at the end of its useful life for $5,000: d) Make the joumal entry to record the sale of the machine at the end of year 3 for $28,000: e) Make the journal entries to record depreciation and the disposal of the machine after 4 % years (assume there was no market to sell the machine so it was discarded): f) Assume that after the end of two years the machine was tested for impairment. The estimated future cash flows from the machine is $35,000 and the fair market value of the machine is $30,000. Calculate the amount of impairment, if any. g) Assume that after the end of two years the machine was tested for impairment. The estimated future cash flows from the machine is $31,000 and the fair market value of the machine is $30,000. Calculate the amount of impairment, if any. h) Assume the machine was depreciated for two years and at that point the company determined that the total estimated useful life of the machine was only five years (total) and the residual value was now estimated to be zero. Make the journal entry to record depreciation expense for the third year
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