Week 3 individual P10-3A - P10-3A On January 1, 2008, Pele...

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

View Full Document Right Arrow Icon

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

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: P10-3A On January 1, 2008, Pele Company purchased the following two machines for use in its production process. Machine A The cash price of this machine was $38,000. Related expenditures included: sales tax $1,700, shipping costs $150, insurance during shipping $80, installation and testing costs $70, and $100 of oil and lubricants to be used with the machinery during its first year of operations. Pele estimates that the useful life of the machine is 5 years with a $5,000 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used. Machine B The recorded cost of this machine was $160,000. Pele estimates that the useful life of the machine is 4 years with a $10,000 salvage value remaining at the end of that time period. Prepare the following for Machine A. The journal entry to record its purchase on January 1, 2008. The journal entry to record annual depreciation at December 31, 2008. Account / Description Debit Credit 1. Depreciation expense Shipping Accumulated depreciation Sales tax expense Accounts receivable Insurance expense MachineryRepairs expenseCashAccounts payable $ Insurance expenseMachinerySales tax expenseRepairs expenseSalesShippingAccounts payableAccumulated depreciationCashDepreciation expenseAccounts receivable $ 2. CashSales tax expenseShippingInsurance expenseRepairs expenseAccounts receivableAccounts payableDepreciation expenseMachinerySalesAccumulated depreciation $ Depreciation expenseAccounts payableAccumulated depreciationInsurance expenseMachineryShippingSalesCashAccounts receivableSales tax expenseRepairs expense Calculate the amount of depreciation expense that should record for machine B each year...
View Full Document

Page1 / 3

Week 3 individual P10-3A - P10-3A On January 1, 2008, Pele...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online