<117 of 501 > Machine A Machine B Cost of the asse Installation costs $9.000 $38.200 Machine C $22,000 800 2.100 1,2001 Renovation costs

Machine A Machine B Cost of the asse Installation costs $9.000 $38.200 Machine C $22,000 800 2.100 1,2001 Renovation costs prior to use 600 1,700 2,200 Repairs after production began 500 600 700 By the end of the first year, each machine had been operating 8,000 hours. Required: 1. Compute the cost of each machine. Explain the rationale for capitalizing or expensing the various costs. 2. Give the journal entry to record depreciation expense at the end of year 1, assuming the following Estimates Machine Life Residual Value A 4 years B 30.000 hours $1,000 4,500 Depreciation Methodi Straight-line Units-of-production C 10 years 1,400 Double-declining-balance PA9-2 Recording and Interpreting the Disposal of Long-Lived Assets LO 9-5 Page 435 Aa6 #