Question
October 1, 2019 Lynbrook Inc. purchased a new machine for one of its stores. The machine's estimated useful life at the time of the purchase
October 1, 2019 Lynbrook Inc. purchased a new machine for one of its stores. The machine's estimated useful life at the time of the purchase was 20 years, and its residual value was $5,000. Purchase price of machine $175,000 Freight costs 7,000 Installation of machine 17,000 Sales taxes 6,000 Cost to repair machine damaged during installation 1,000 Instructions: A. Compute depreciation expense for the years 2019 through 2021 under each depreciation method listed below: 1. Straight-line, with fractional years rounded to the nearest whole month. (partial-years method) 2. 200 percent declining-balance, using the half-year convention. B. Calculate the book value for the two depreciation methods applied in part A at the end of 2021? C. March 31, 2022 Lynbrook Inc. sold the machine that was purchased above for $175,000. Prepare the journal entry (in proper general journal format) to record the sale of the machine under the following conditions: 1. Straight-line, with fractional years rounded to the nearest whole month. (partial-years method) 2. 200 percent declining-balance, using the half-year convention. Reminder: Continue using the excel HW policies for preparing your solutions to the above questions, including the standard four line heading.
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