Question 7

The following data relate to the Machinery account of Sheridan, Inc. at December 31, 2025.

		Machinery
		A		B		C		D
Original cost		$49,220		$54,570		$85,600		$85,600
Year purchased		2020		2021		2022		2024
Useful life		10 years		15,000 hours		15 years		10 years
Salvage value		$3,317		$3,210		$5,350		$5,350
Depreciation method		Sum-of-the-years'-digits		Activity		Straight-line		Double-declining balance
Accum. depr. through 2025*		$33,384		$37,664		$16,050		$17,120

*In the year an asset is purchased, Sheridan, Inc. does not record any depreciation expense on the asset. In the year an asset is retired or traded in, Sheridan, Inc. takes a full year's depreciation on the asset. The following transactions occurred during 2026.

a.	On May 5, Machine A was sold for $13,910 cash. The company's bookkeeper recorded this retirement in the following manner in the cash receipts journal.

	Cash	13,910
	Machinery (Machine A)		13,910

b.	On December 31, it was determined that Machine B had been used 2,250 hours during 2026.
c.	On December 31, before computing depreciation expense on Machine C, the management of Sheridan, Inc. decided the useful life remaining from January 1, 2026, was 10 years.
d.	On December 31, it was discovered that a machine purchased in 2025 had been expensed completely in that year. This machine cost $29,960 and has a useful life of 10 years and no salvage value. Management has decided to use the double-declining-balance method for this machine, which can be referred to as "Machine E."

Prepare necessary correcting entries for the year 2026. Record the appropriate depreciation expense on the above-mentioned machines. No entry is necessary for Machine D. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round intermediate calculations to 3 decimal places, e.g. 4.589 and final answers to 0 decimal places, e.g. 45,892. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.)

No.	Account Titles and Explanation	Debit	Credit
a.	enter an account title to record current depreciation	enter a debit amount	enter a credit amount
	enter an account title to record current depreciation	enter a debit amount	enter a credit amount
	(To record current depreciation)
	enter an account title to properly record the sale	enter a debit amount	enter a credit amount
	enter an account title to properly record the sale	enter a debit amount	enter a credit amount
	enter an account title to properly record the sale	enter a debit amount	enter a credit amount
	(To properly record the sale)
b.	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
c.	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
d.	enter an account title to correct the incorrect expensing of the asset in 2025	enter a debit amount	enter a credit amount
	enter an account title to correct the incorrect expensing of the asset in 2025	enter a debit amount	enter a credit amount
	(To correct the incorrect expensing of the asset in 2025)
	enter an account title to record depreciation	enter a debit amount	enter a credit amount
	enter an account title to record depreciation	enter a debit amount	enter a credit amount
	(To record depreciation)