Question
SolMfg Company purchased a new machine for $400,000 on September 1, 2020 . It is estimated that the machine will have $40,000 residual value at
SolMfg Company purchased a new machine for $400,000 on September 1, 2020. It is estimated that the machine will have $40,000 residual value at the end of its 5-year useful service life.
Please prepare a depreciation schedule which shows the annual depreciation expense on the machine for its 5-year life.
Instructions
- Company is using straight line depreciation method;
| Year | Depreciable amount |
Rate | Annual Depreciation expense | Accumulated Depreciation | Book Value End of Year |
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| 2020 |
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| 2021 |
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| 2022 |
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| 2023 |
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| 2024 |
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| 2025 |
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- Please prepare a journal entry on December 31, 2020 to record 2020 depreciation
- The Company sold the machine on June 30,2023 for $260,000 cash. Please prepare journal entries on June 30,2023.
- Please prepare the depreciation schedule below if the Company is using double declining method
| Year | Book Value Beginning of Year |
Rate | Annual Depreciation expense | Accumulated Depreciation | Book Value End of Year |
| 2020 |
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| 2021 |
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| 2022 |
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| 2023 |
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| 2024 |
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| 2025 |
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- The Company sold the machine on June 30, 2023 for $220,000 cash. Please prepare journal entries on June 30,2023
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Intermediate accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson
7th edition
978-0077614041, 9780077446475, 77614046, 007744647X, 77647092, 978-0077647094
