Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Problem 10-3A (Part Level Submission) On January 1, 2017, Evers Company purchased the following two machines for use in its production process. Machine A: The
Problem 10-3A (Part Level Submission) On January 1, 2017, Evers Company purchased the following two machines for use in its production process. Machine A: The cash price of this machine was $37,500. Related expenditures included: sales tax $3,350, shipping costs $150, insurance during shipping $60, installation and testing costs $50, and $150 of oil and lubricants to be used with the machinery during its first year of operations. Evers estimates that the useful life of the machine is 5 years with a $4,150 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used. Machine B: The recorded cost of this machine was $180,000. Evers estimates that the useful life of the machine is 4 years with a $9,800 salvage value remaining at the end of that time period. (a) Your answer is correct. Prepare the following for Machine A. (Round answers to 0 decimal places, e.g. 5,125. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) 1. The journal entry to record its purchase on January 1, 2017. 2. The journal entry to record annual depreciation at December 31, 2017. No. Account Titles and Explanation Debit Credit 1. Equipment 41110 > Cash 41110 w 2. Depreciation Expense 7392 > Accumulated Depreciation-Equipment 7392 (b) Your answer is partially correct. Try again. Calculate the amount of depreciation expense that Evers should record for Machine B each year of its useful life under the following assumptions. (Round depreciation cost per unit to 2 decimal places, e.g. 12.25. Round final answers to 0 decimal places, e.g. 2,125.) (1) (2) (3) Evers uses the straight-line method of depreciation. Evers uses the declining-balance method. The rate used is twice the straight-line rate. Evers uses the units-of-activity method and estimates that the useful life of the machine is 130,150 units. Actual usage is as follows: 2017, 47,000 units; 2018, 36,500 units; 2019, 26,000 units; 2020, 20,650 units. Depreciation Expense 2018 2019 2017 2020 > Straight-line method 42550 42550 42550 42550 > Declining-balance method 90000 45000 22500 12500 Units-of-activity method 61272 47656 34040 27232 $ Attempts: 1 of 2 used
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started