machine 1:
cost 76,000
salvage value 6,000
useful life 10 years
purchased 7/1/16

machine 2:
cost 80,000
salvage value 10,000
useful life 8 years
purchased 1/1/13

machine 3:
cost 78,000
salvage value 6,000
useful life 6 years = 24,000 hours
purchased 1/1/18

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Problem: In recent years, Hrubeck Company purchased three machines. Because of heavy turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods were selected. Information concerning the machines is summarized below. Machine Acquired Cost 7/1/16 $76,000 1 2 3 Notes: Salvage Useful Life Value in Years: $6,000 1/1/13 $80,000 $10,000 1/1/18 $78,000 $6,000 10 8 6 Depreciation Method Straight-line Declining balance Units-of-activity For the declining balance method, the company uses the double declining. rate (of the straight-line rate). For the units-of-activity method, total machine hours are expected to be 24,000. Actual hours of use in the first 3 years are shown on the depreciation schedule. Instructions: 1 For each machine, complete a depreciation schedule that records annual depreciation expense, accumulated depreciation, and book value. 2 Journalize the depreciation adjusting entry for all 3 machines at December 31, 2020. Check figures: Machine 1 accumulated depreciation at end of Year 5 = $31,500 Machine 2 book value at start of Year 4 = $33,750 Machine 3 depreciation expense for Year 1 = $3,000 Problem: In recent years, Hrubeck Company purchased three machines. Because of heavy turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods were selected. Information concerning the machines is summarized below. Machine Acquired Cost 7/1/16 $76,000 1 2 3 Notes: Salvage Useful Life Value in Years: $6,000 1/1/13 $80,000 $10,000 1/1/18 $78,000 $6,000 10 8 6 Depreciation Method Straight-line Declining balance Units-of-activity For the declining balance method, the company uses the double declining. rate (of the straight-line rate). For the units-of-activity method, total machine hours are expected to be 24,000. Actual hours of use in the first 3 years are shown on the depreciation schedule. Instructions: 1 For each machine, complete a depreciation schedule that records annual depreciation expense, accumulated depreciation, and book value. 2 Journalize the depreciation adjusting entry for all 3 machines at December 31, 2020. Check figures: Machine 1 accumulated depreciation at end of Year 5 = $31,500 Machine 2 book value at start of Year 4 = $33,750 Machine 3 depreciation expense for Year 1 = $3,000

Answer rating: 100% (QA)

1 Depreciation on Machine 1 Depreciation Purchase price Salvage value Useful life of asset Depreciat... View the full answer