PA9-1 (Algo) Computing Acquisition Cost and Recording Depreciation under Three Alternative Methods [LO 9-2, LO 9-3] [The following information applies to the questions displayed below.) At the beginning of the year, Cruz & Turner Corporation bought three used machines. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts. Details for Machine A are provided below. Cost of the asset Installation costs Renovation costs prior to use Repairs after production began $10,700 970 1,110 850 2. Compute year 2 straight-line depreciation expense for Machine A, assuming an estimated life of 4 years and $1,000 residual value. Year 2 straight-line depreciation expense 3. Prepare the journal entry to record year 2 straight-line depreciation expense for Machine A, assuming an estimated life of 4 years and $1,000 residual value. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the year 2 depreciation expense for Machine A. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal 4. Compute year 2 units-of-production depreciation expense for Machine B, assuming a capitalized cost of $49,140, an estimated life of 30,000 hours, $4,500 residual value, and actual year 2 use of 8,000 hours. (Do not round intermediate calculations.) Year 2 units-of-production depreciation expense 5. Prepare the journal entry to record year 2 units-of-production depreciation expense for Machine B, assuming a capitalized cost of $49,140, an estimated life of 30,000 hours, $4,500 residual value, and actual year 2 use of 8,000 hours. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the year 2 depreciation expense for Machine B. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal 6. Compute years 1 and 2 double-declining balance depreciation expense for Machine C, which has a cost of $27,100, an estimated life of 10 years, and $1,400 residual value. Year 1 Year 2 Double-declining-balance 7. Prepare the journal entry to record year 2 double-declining balance depreciation expense for Machine C, which has a cost of $27,100, an estimated life of 10 years, and $1,400 residual value. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the year 2 depreciation expense for Machine C. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal
