work Assignment $8$ Chapter $8$

Question $2$ of $7$

$-120$

On March $20,2020,$ FineTouch Corporation purchased two machines at auction for a combined total cost of $$222,000.$ The machines were listed in the auction catalogue at $$110,000$ for machine $x$ and $$155,000$ for machine $Y.$ Immediately after the auction, FineTouch had the machines professionally appraised so it could increase its insurance coverage. The appraisal put a fair value of $$111,320$ on machine $x$ and $$130,680$ on machine $Y.$

On March $24,$ FineTouch paid a total of $$5,000$ in transportation and installation charges for the two machines. No further expenditures were made for machine X$,$ but $$5,200$ was paid on March $29$ for improvements to machine Y$.$ On March $31,2020,$ both machines were ready to be used.

The company expects machine $x$ to last five years and to have a residual value of $$3,200$ when it is removed from service, and it expects machine $Y$ to be useful for eight more years and have a residual value of $$13,540$ at that time. Due to the different characteristics of the two machines, different depreciation methods will be used for them: machine $x$ will be depreciated using the double$-$diminishing$-$balance method and machine $Y$ using the straight$-$line method.

Prepare the journal entry to record the purchase of the machines, indicating the initial cost of each. $($Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round percentage to $1$ decimal place, for e$.$g$.40\mathrm{.}1$ and Round answers to the nearest whole dollar, e$.$g$\mathrm{.}5,275.$ If no entry is required, select $"$No Entry" for the account titles and enter O for the amounts.$)$

Date Account Titles and Explanation

Debit

Credit