On January 1, 2022, Novak Company purchased the following two machines for use in its production process.

Machine A:		The cash price of this machine was $53,500. Related expenditures also paid in cash included: sales tax $3,650, shipping costs $200, insurance during shipping $100, installation and testing costs $60, and $150 of oil and lubricants to be used with the machinery during its first year of operations. Novak estimates that the useful life of the machine is 5 years with a $4,400 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used.
Machine B:		The recorded cost of this machine was $180,000. Novak estimates that the useful life of the machine is 4 years with a $9,500 salvage value remaining at the end of that time period.

(a)

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Prepare the following for Machine A. (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.)

1.		The journal entry to record its purchase on January 1, 2022.
2.		The journal entry to record annual depreciation at December 31, 2022.

No.	Account Titles and Explanation	Debit	Credit
1.	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
2.	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

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List of Accounts

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(b)

Calculate the amount of depreciation expense that Novak should record for Machine B each year of its useful life under the following assumptions. (Round depreciation cost per unit to 2 decimal places, e.g. 12.25. Round final answers to 0 decimal places, e.g. 2,125.)

(1)		Novak uses the straight-line method of depreciation.
(2)		Novak uses the declining-balance method. The rate used is twice the straight-line rate.
(3)		Novak uses the units-of-activity method and estimates that the useful life of the machine is 155,000 units. Actual usage is as follows: 2022, 52,500 units; 2023, 42,500 units; 2024, 32,500 units; and 2025, 27,500 units.

		Depreciation Expense
		2022		2023		2024		2025
Straight-line method		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
Declining-balance method		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
Units-of-activity method		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount