[The following information applies to the questions displayed below.]

At the beginning of the year, Plummer's Sports Center bought three used fitness machines from Advantage, Inc. The machines immediately were overhauled, installed, and started operating. The machines were different; therefore, each had to be recorded separately in the accounts.

	Machine A		Machine B		Machine C
Amount paid for asset	$	21,800	$	37,300	$	16,900
Installation costs		600		1,800		2,000
Renovation costs prior to use		3,300		1,800		3,100

By the end of the first year, each machine had been operating 4,900 hours.

References

Section BreakP8-3 Computing the Acquisition Cost and Recording Depreciation under Three Alternative Methods LO8-2, 8-3

8.

value: 11.11 points

Required information

P8-3 Part 1

Required:

1. Compute the cost of each machine.

References

eBook & Resources

WorksheetDifficulty: 2 MediumLearning Objective: 08-03 Apply various cost allocation methods as assets are held and used over time.

P8-3 Part 1Learning Objective: 08-02 Apply the cost principle to measure the acquisition and maintenance of property, plant, and equipment.

Check my work

9.

value: 11.12 points

Required information

P8-3 Part 2

2. Prepare the entry to record depreciation expense at the end of year 1, assuming the following. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

	ESTIMATES
Machine		Life	Residual Value		Depreciation Method
A		7 years	$1,200		Straight-line
B		76,000 hours	2,900		Units-of-production
C		8 years	1,600		Double-declining-balance

Journal entry worksheet

• Record the depreciation expense for year 1.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
1