On January 1, 2016, Aylmer Inc purchased a new machine. The invoice price for the machine was
Question:
On January 1, 2016, Aylmer Inc purchased a new machine. The invoice price for the machine was 310,000
Aylmer incurred the following costs related to the machine:
Shipping and installation of the machine 16,000
Cost of testing the machine 22,000
The machine is expected to have a useful life of 15 years and is expected to have no residual value.
On April 2, 2018, Aylmer had to replace some belts on the machine. The belts cost $1,350.
On January 1, 2021; Aylmer had to make some additions to the machine in the amount of 123,000
The additions did not change the useful life of the machine.
Aylmer uses the straight-line method of calculating depreciation.
Aylmer has a December 31 year end and recorded depreciation annually.
Instructions:
Prepare the appropriate entry for the following dates:
a) Prepare the journal entry at January 1, 2016.
b) Prepare the required journal entry at December 31, 2016.
c) Prepare the required journal entry at April 2, 2018
d) Prepare the required journal entry at January 1, 2021
e) Prepare the required journal entry at December 31, 2021
