1. KelseyCo is a specially sheet-metal manufacturing company that manufactures high-tech sheet-metal products for the electronics industry. All of their Brakes (sheet-metal bending equipment) are mostly all high-volume computer-controlled equipment. The company has 4 older manual Brakes that are taking up valuable floor space and the company wants to buy more automated equipment to replace them.

The four older Brakes were purchased at the same time six years ago for $5,000 each and were put in the service at the same time. The brakes have a 10-year usable life and a salvage value of $500 each. The Brakes are being depreciated using the straight-line method The company has contacted a machine tools dealer who has made a bundled offer to buy all 4 Brakes.

Required: 

a. Assume the machine tool dealer offered the company $12,000 in cash for the 4 Brakes as a bundled purchase and the company accepted the offer. Make the required journal entry record the sale of the lathe.

b. Assume the machine tool dealer offered the company $7,500 in cash for the 4 Brakes as a bundled purchase and the company accepted the offer. Make the required journal entry record the sale of the lathe.

2. You have been given the completed payroll register below:

TAXABLE EARNINGS

EMPLOYEE DEDUCTIONS

TOTAL

PAY

STATE UNEMP

FED UNEMP

FICA

(S.S)

MEDICARE

FICA

(S.S)

MEDICARE

FED INC TAX

STATE INC TAX

HEALTH

CARE

TOTAL DEDCT.

NET PAY

80,000

26,667

23,704

65,185

80,000

4,960

1,116

20,750

8,000

12,250

47,076

32,924

Required:

a. Make the journal entry to record the payroll expense 

b, Make the journal entry to record the employer Payroll taxes. The federal unemployment tax is $248 and the state unemployment tax is $1,349

3. On 1/1/21 KELLco purchased a new Bandbury Mixer for an installed cost of $850,000.The physical life of the lathe is 10 years with a salvage value of $60,000 at the end of that time period. It is the policy of KELco to replace their Bandbury Mixer once every eight years. At that time the mixer will have a salvage value of $75,000

Required: 

Assume the company uses straight-line depreciation, make the required journal entry on 12/31/21 and 12/31/22.

Assume the company uses 200% double declining balance depreciation, make the required journal entry on 12/31/21 assuming and 12/31/22.

Answer rating: 100% (QA)

Problem 1 Company has 4 brakes purchased 6 years ago costing total 5000 4 20000 Total salvage value ... View the full answer