P8-3 Computing the Acquisition Cost and Recording Depreciation under Three Alternative Methods LO8-2, 8-3
At the beginning of the year, Plummers Sports Center bought three used fitness machines from Advantage, Inc. The machines immediately
were overhauled, installed, and started operating. The machines were different; therefore, each had to be recorded separately in the accounts.
		Machine A	Machine B	Machine C
	Amount paid for asset	$ 11,000	$ 30,000	$ 8,000
	Installation costs	500	1,000	500
	Renovation costs prior to use	2,500	1,000	1,500
	By the end of the first year, each machine had been operating 4,800 hours.
Required:
1	Compute the cost of each machine.
		Total Cost
	Machine A
	Machine B
	Machine C
Required:
2	Prepare one entry to record depreciation expense at the end of year 1, assuming the following:
	(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	5 years	$1,000	Straight-line
	B	60,000 hours	2,000	Units-of-production
	C	4 years	1,500	Double-declining-balance
Transaction	General Journal	Debit	Credit
1	Depreciation expense	10,000