Question
On December 31, 2020, Culver Inc. has a machine with a book value of $958,800. The original cost and related accumulated depreciation at this date
On December 31, 2020, Culver Inc. has a machine with a book value of $958,800. The original cost and related accumulated depreciation at this date are as follows. Machine $1,326,000 Less: Accumulated depreciation 367,200 Book value $958,800 Depreciation is computed at $61,200 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)A fire completely destroys the machine on August 31, 2021. An insurance settlement of $438,600 was received for this casualty. Assume the settlement was received immediately
B)On April 1, 2021, Culver sold the machine for $1,060,800 to Yoakam Company
C)On July 31, 2021, 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 $1,122,000
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