P8-3 (Algo) Computing the Acquisition Cost and Recording Depreciation under Three Alternative Methods LO8-2, 8-3

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At the beginning of the year, Plummer's Sports Center bought three used fitness machines from Primo Fitness, an established supplier of used, new and refurbished gym equipment in Southern California. The machines immediately were overhauled and started operating. The machines were different; therefore, each had to be recorded separately in the accounts.

	Machine A	Machine B	Machine C
Invoice price paid for asset	$27,800	$33,700	$18,450
Shipping costs (paid by Plummer)	2,100	2,500	1,800
Renovation costs prior to use	2,900	1,600	2,500

By the end of the first year, each machine had been operating 5,600 hours.

P8-3 Part 2

2. Prepare the entry to record depreciation expense at the end of Year 1, assuming the following.

Note: Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

	ESTIMATES
Machine	Life	Residual Value	Depreciation Method
A	9 years	$1,300	Straight-line
B	68,000 hours	3,800	Units-of-production
C	7 years	3,100	Double-declining-balance

Journal entry worksheet 1 Record the depreciation expense for year 1. Note: Enter debits before credits. Transaction General Journal a Depreciation expense Accumulated depreciation, Machine A Accumulated depreciation, Machine B Accumulated depreciation, Machine C Debit Credit Record entry Clear entry View general journal