The Wilcox Company acquires four machines that have the following characteristics:

Required
1. Prepare journal entries to record the acquisition and the first year's depreciation, assuming that the composite method is used on a straight-line basis.
2. If the company sells machine B after four years for $10,000, prepare the journal entry.
3. What arguments may be used to support the composite depreciationmethod?

Transcribed Image Text:

Estimated Residual Value $2,000 1,000 5,000 Estimated Service Life 6 years 9 5 7 Machine Cost $26,000 19,000 30,000 28,000