P50 fr A 2 3 M 5 6. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 D E F G H J K L Brown Company paid cash to purchase the assets of Coffee Company on January 1, 2019. Information is as follows: Total cash paid $3.500.000 Assets acquired: Land S600.000 Building 5500,000 Machinery Sgoo, ooo Patents 5500,000 The building is depreciated using the double-declining balance method. Other information is: Salvage value $50.000 Estimated useful life in years The machinery is depreciated using the units-ot-production method. Other information is: Salvage value. percentage of cost 1096 Estimated total production output in ZUUUUU Actual production in units was as 2019 40.000 2020 UUUUU 2021 20.000 The patents are amortized on a straight-line basis. They have no salvage valu Estimated useful life of patents in 30 On December 31, 2020. the value of the patents was estimated to be $100.000 Where applicable, the company uses the Ye year rule to calculate depreciation and amortization expense in the years of acquisition and disposal. Its fiscal year-end is December 31 The machinery was traded on December 2, 2021 for new machinery Other information is: Fair value of old machinery $240.000 Trade-in allowance $288 List price for new machinery $403,200 Estimated useful life of new machinery in Estimated salvage value of new S8.064 The new machinery is depreciated using the straight-line method and 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 On August 14, 2023, an addition was made. This amount was material. Other relevant information is as follows: Amount of addition, paid in cash $100.000 Number of years of useful life from 2023 (original machinery and addition): 30 Salvage value, percentage of addition 10% Required: Prepare journal entries to record: 1 The purchase of the assets of Coffee 2 Depreciation and amortization expense on the purchased assets for 2019 3 The decline (if any) in value of the patents at December 31 4 The trade-in of the old machinery and purchase of the new 5 Depreciation on the new machinery for 2021 Cost of the addition to the machinery on August 14, 2023 7 Depreciation on the new machinery for 2023 Required Jnl. Entries Copyright Saved File Home Insert Draw Page Layout Formulas Data Review View Help J14 B D E F 1 Brown Company GENERAL JOURNAL 4 Description PR Debit Credit 00 O W N 5 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Required Jnl. Entries Copyright + Ready
