James Company purchased four identical machines on January 10, 2019, paying $5,500 for each. The useful life of each machine is expected to be five years, with a salvage value of $700 each. The company uses the straight-line method of depreciation. Selected transactions involving the machines follow. The accounts for recording these transactions are also given.

INSTRUCTIONS
Record the transactions in general journal form. Round all calculations to the nearest whole dollar.
ACCOUNTS
101 Cash
141 Machinery
142 Accumulated Depreciation€”Machinery
495 Gain on Sale of Machinery
541 Depreciation Expense€”Machinery
595 Loss on Sale of Machinery
597 Loss on Stolen Machinery

Analyze: What is the balance of the Accumulated Depreciation account on December 31, 2022?

Transcribed Image Text:

DATE TRANSACTIONS FOR 2019 Paid $5,500, in cash, for each of four machines. Jan. 10 Dec. 31 Recorded depreciation for the year on the four machines. DATE TRANSACTIONS FOR 2020 Apr. 3 Machine 1 was stolen; no insurance was carried. Dec. 31 Recorded depreciation for the year for the three remaining machines. DATE TRANSACTIONS FOR 2021 Sold machine 2 for $3,200 cash. Sept. 18 Dec. 31 Recorded depreciation for the year on the two remaining machines. DATE TRANSACTIONS FOR 2022 Machine 3 was traded in for a similar machine (no. 5) with a $6,580 list price and fair market value. A trade-in allowance of $2,510 was received. The balance was paid in cash. The new machine has an estimated life of five years and salvage value of $700. June 4 Machine 4 was traded in for a similar machine (no. 6) with an $8,200 list price and fair market value. A trade-in allowance of $1,390 was received. The balance was paid in cash. The new machine has an estimated life of five years, with salvage value of $700. Aug. 29 Dec. 31 Record depreciation on the two new machines.