Question

(a)Logo Company purchased a machine at a cost of $ 100,000 on 1/1/2014. The machine is expected to have a $2,000 salvage value at the end of its 5-year useful life.

Instructions:

1. Compute the depreciation rate.
2. Using the straight-line method, "prepare a" depreciation schedule, showing the annual depreciation expense for the machine over its 5-years life.

Record the depreciation expense on 31/12/2014 in the general journal.

Answer:

(b) Journal entry for the first year

Answer

(c) Khamis Company purchases a vehicle at a cash price of $120,000.Related expenditures are sales taxes $15,000, painting and lettering $2,000, motor vehicle license $800, and a three-year accident insurance policy, $1,600.Compute the cost of the vehicle.

Answer