Opt_Prob_Solutions_chap_8_Solutions

# Opt_Prob_Solutions_chap_8_Solutions - Chapter 8 Optional...

This preview shows pages 1–2. Sign up to view the full content.

Chapter 8 Optional Problem Solutions P8–3. Req. 1 Cost of each machine: Machine A B C Total Purchase price ..................................... \$7,600 \$25,600 \$6,800 \$40,000 Installation costs .................................. 300 500 200 1,000 Renovation costs ................................. 2,000 400 600 3,000 Total cost .......................................... \$9,900 \$26,500 \$7,600 \$44,000 Req. 2 Computation of depreciation at the end of year 1 for each machine: Machine Method Computation A Straight-line (\$9,900 - \$1,500) x 1/5 years = \$1,680 B Units-of-production (\$26,500 - \$900) ÷ 20,000 hours = \$1.28 \$1.28 x 2,000 hours = \$2,560 C Double-declining-balance (\$7,600 - 0) x 2/4 years = \$3,800 Adjusting entry: Depreciation expense (\$1,680 + \$2,560 + \$3,800) (+E, - SE) 8,040 Accumulated depreciation, Machine A (+XA, - A) 1,680 Accumulated depreciation, Machine B (+XA, - A) 2,560 Accumulated depreciation, Machine C (+XA, - A) 3,800

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
AP8–5. Req. 1 a. Machine A - Jan. 1, 2007: (1) Depreciation expense in 2007 - none recorded because disposal date was Jan. 1, 2007. (2) To record disposal: Cash (+A) ............................................................................ 5,750 Accumulated depreciation, machine A ( - XA, +A) ............... 17,600 Loss on disposal of machine (+Loss, - SE) ......................... 650 Machine A ( - A) ............................................................. 24,000 b. Machine B - December 31, 2007: (1) To record depreciation expense for 2007: Depreciation expense (+E,
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern