The following transactions occurred during 2016. Assume that depreciation of 10% per year is charged on all
Question:
The following transactions occurred during 2016. Assume that depreciation of 10% per year is charged on all machinery and 5% per year on buildings, on a straightline basis, with no estimated residual value. Depreciation is charged for a full year on all fixed assets acquired during the year, and no depreciation is charged on fixed assets disposed of during the year.
Jan. 30 A building that cost \($112\),000 in 1999 is torn down to make room for a new building. The wrecking contractor was paid \($5\),100 and was permitted to keep all materials salvaged.
Mar. 10 Machinery that was purchased in 2009 for \($16\),000 is sold for \($2\),900 cash, f.o.b. purchaser’s plant. Freight of \($300\) is paid on the sale of this machinery.
Mar. 20 A gear breaks on a machine that cost \($9\),000 in 2011. The gear is replaced at a cost of \($3\),000. The replacement does not extend the useful life of the machine.
May 18 A special base installed for a machine in 2010 when the machine was purchased has to be replaced at a cost of \($5\),500 because of defective workmanship on the original base. The cost of the machinery was \($14\),200 in 2010. The cost of the base was \($4\),000, and this amount was charged to the Machinery account in 2010.
June 23 One of the buildings is repainted at a cost of \($6\),900. It had not been painted since it was constructed in 2012.
Instructions Prepare general journal entries for the transactions. (Round to the nearest dollar.)
Step by Step Answer:
Intermediate Accounting IFRS Edition
ISBN: 9781118443965
2nd Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield