Question
On October 1, 2010, XZY Corp. ordered a new machine to help increase production for one of its most popular products, the XZY-4G. The machine
On October 1, 2010, XZY Corp. ordered a new machine to help increase production for one of its most popular products, the XZY-4G. The machine had an invoice price of $30,000 and XZY was required to pay for shipping ($1,200) and insurance during shipping ($300) by boat from Newfoundland to Kingston, Ontario. The machine arrived on January 2, 2011 and was immediately subject to test runs at a cost of $1,000. On January 3, 2011, it was put into operation. Required a. Prepare a journal entry (or entries) to record all costs associated with the new machine. b. The machine was expected to last 10 years with a salvage value of $4,000. Prepare the journal entry to record depreciation for 2011 (XZY uses the double-declining balance method of depreciation). c. Unfortunately the expected increase in sales for the XZY-4G product did not occur. XZY sold the machine on July 1, 2012 for $19,000. Prepare all journal entries required by XZY in 2012 relating to the machine and its disposal
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