ORIE_350_Homework__6_answers_S2007

ORIE_350_Homework__6_answers_S2007 - ORIE 350 Due March 6...

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ORIE 350 Homework #6 Due March 6, 2007 by 4:30 PM. Submission in class is encouraged. Please work the problems in the order in which they appear here. 1. On January 1, 2006, Hutton Company acquired a machine for $85,000. The company had to pay $2,000 shipping and installation, and $2,500 for calibration, before the machine could be used. The useful life is 5 years, and the salvage value is $7,000. a) Show the January 1, 2006 journal entry required to record acquistion. Jan. 1, 2006 Machinery $89,500 Cash $89,500 Note: All of the costs needed to put the asset into use are included in the cost of the asset. b) Show the journal entry required to record depreciation expense for fiscal 2008. Hutton Company’s fiscal year end is December 31. Dec. 31, 2008 Depreciation Expense $16,500 Accumulated Depreciation $16,500 Note: The depreciation is only for fiscal year 2008. We are not trying to record all of the depreciation since the asset was purchased. c) On December 31, 2009, Hutton sold the machine to another company for $15,000.
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