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Good evening, I need help with this problem Brown Company paid cash to purchase the assets of Coffee Company on January 1, 2019. Information is
Good evening, I need help with this problem
Brown Company paid cash to purchase the assets of Coffee Company on January 1, 2019. Information is as follows Total cash paid $3.500.000 Assets acquired: Land SOO0.000 Building 500.000 Machinery 5900.000 Patents 3600,000 The building is depreciated using the double-declining balance method. Other information is Salvage value 550.000 Estimated useful life in years The machinery is depreciated using the units-of-production methos Other information is Salvage value, percentage of cost 10% Estimated total production output in ZUUUUU Actual production in units was as 2019 40.000 2020 GUUUU 2021 Zooloo The patents are amortized on a straight-line basis. They have no salvage valu Estimated useful life of patents in On December 31, 2020, the value of the patents was estimated to be $100.000 Where applicable, the company uses the year rule to calculate depreciation and amortization expense in the years of acquisition and disposal. Its fiscal year-end is December 31 The machinery was traded on December 2.2021 for new machinery Other information is Fair value of old machinery $240.000 Trade-in allowance $288.000 List price for new machinery 3403.200 Estimated useful life of new machinery in Estimated salvage value of new $8,004 The new machinery is depreciated using the straight-line method and On August 14, 2023. an addition was made. This amount was material. Other relevant information is as follows Amount of addition, paid in cash $100.000 Number of years of useful life from 2023 (original machinery and addition) 30 Salvage value. percentage of addition Required: Prepare journal entries to record 1 The purchase of the assets of Coffee 2 Depreciation and amortization expense on the purchased assets for 2019. 3. The decline (if any) in value of the patents at December 31 4 The trade-in of the old machinery and purchase of the new 5 Depreciation on the new machinery for 2021 e cost of the addition to the machinery on August 14.2023 7 Depreciation on the new machinery for 2023 Step by Step Solution
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