The Basrah Company acquired the following machines on July 5. 1995. Machine no. 100 101 102...
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The Basrah Company acquired the following machines on July 5. 1995. Machine no. 100 101 102 cost S 40000 15300 47500 Estimated salvage $8500 1300 2500 Service life 6 year 7 5 Jan. 2. 1996 purchased machine no. 103 for S 60000. Estimated service life 10 years. estimated salvage value S 5000. May 1. 1997 sold machine ( no.100 for S 23000 and replaced it with machine (no. 104). which was purchased for S 54000 and has an estimated salvage value of S 10800 at the end of eight years. Oct. 1. 1998 trading machine (ne. 102 for a new machine (no. 105) paying S 45000 in cash and receiving atrade-in allowance ( equal to market value ofS 16000 Machine ( no. 105 ) has an estimated life of 10 years and estimated salvage value of S 6000. Required: a) Compute and record depreciation on the machines for the years 1995. 1996. 1997. The company uses straight-fine method for all the machines except the machine (no. Joj J. it uses sum-of-years-digits. b) Prepare journal entries to record the sale of machine ( no.100) and the trade-in of machine ( no.102. show computations. The Basrah Company acquired the following machines on July 5. 1995. Machine no. 100 101 102 cost S 40000 15300 47500 Estimated salvage $8500 1300 2500 Service life 6 year 7 5 Jan. 2. 1996 purchased machine no. 103 for S 60000. Estimated service life 10 years. estimated salvage value S 5000. May 1. 1997 sold machine ( no.100 for S 23000 and replaced it with machine (no. 104). which was purchased for S 54000 and has an estimated salvage value of S 10800 at the end of eight years. Oct. 1. 1998 trading machine (ne. 102 for a new machine (no. 105) paying S 45000 in cash and receiving atrade-in allowance ( equal to market value ofS 16000 Machine ( no. 105 ) has an estimated life of 10 years and estimated salvage value of S 6000. Required: a) Compute and record depreciation on the machines for the years 1995. 1996. 1997. The company uses straight-fine method for all the machines except the machine (no. Joj J. it uses sum-of-years-digits. b) Prepare journal entries to record the sale of machine ( no.100) and the trade-in of machine ( no.102. show computations.
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Step 1 Calculate Depreciation First lets calculate the annual depreciation using the straightline method and the sumofyearsdigits method Heres the calculation for each machine Machine 100 StraightLine ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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