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TT Company had the following transactions in 20X4: On 1 January 20X4, a new machine was purchased at a list price of $24,500. The company
TT Company had the following transactions in 20X4:
- On 1 January 20X4, a new machine was purchased at a list price of $24,500. The company did not take advantage of a 2% cash discount available upon full payment of the invoice within 30 days. Shipping cost paid by the vendor was $180. Installation cost was $540, including $180 that represented 10% of the monthly salary of the factory superintendent (installation period, two days). A wall was moved two metres at a cash cost of $630 to make room for the machine. The machine was considered to have two components; an engine valued at $1,000 (net) and the general machine for the balance of the cost.
- On 1 January 20X4, the company purchased an automatic counter to be attached to a machine in use; the cost was $378. The estimated useful life of the counter was 7 years, and the estimated life of the machine was 10 years.
- On 1 January 20X4, the company bought plant fixtures with a list price of $2,550, paying $850 cash and giving a one-year, non-interest-bearing note payable for the balance. The current interest rate for this type of note was 15%. Use the net method to record the note payable.
- During January 20X4, the first month of operations, the newly purchased machine became inoperative due to a defect in manufacture. The vendor repaired the machine at no cost to GTT; however, the specially trained operator was idle during the two weeks the machine was inoperative. The operator was paid regular wages ($465) during the period, although the only work performed was to observe the repair by the factory representative.
- During January 20X5, the company exchanged the electric motor on the machine in part (a) for a heavier motor and gave up the old motor and $680 cash. The market value of the new motor was $1,410. The parts list showed a $1,020 cost for the original motor, and it had been depreciated in 20X4 (estimated life, 10 years).
(PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.)
Required: Prepare the journal entries to record each of the above transactions as of the date of occurrence. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round time value factor to 5 decimal places and final answer to the nearest whole dollar amount.)
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