Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, 2022, Swifty Company purchased the following two machines for use in its production process. Machine A: The cash price of this machine

image text in transcribed
On January 1, 2022, Swifty 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 $2,600, shipping costs $100, insurance during shipping $120, installation and testing costs $80, and $150 of oil and lubricants to be used with the machinery during its first year of operations. Swifty estimates that the useful life of the machine is 5 years with a $4,200 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. Swifty estimates that the useful life of the machine is 4 years with a \$-9,100 salvage value remaining at the end of that time period. (a) 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 O 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. On January 1, 2022, Swifty 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 $2,600, shipping costs $100, insurance during shipping $120, installation and testing costs $80, and $150 of oil and lubricants to be used with the machinery during its first year of operations. Swifty estimates that the useful life of the machine is 5 years with a $4,200 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. Swifty estimates that the useful life of the machine is 4 years with a \$-9,100 salvage value remaining at the end of that time period. (a) 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 O 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Statement Fraud Casebook Baking The Ledgers And Cooking The Books

Authors: Joseph T. Wells

1st Edition

0470934417, 978-0470934418

More Books

Students also viewed these Accounting questions

Question

define what is meant by the term human resource management

Answered: 1 week ago