On January 1, 2017, Marco Polo Co. ordered a new machine to help increase production for one

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Question:

On January 1, 2017, Marco Polo Co. ordered a new machine to help increase production for one of its most popular products.

The machine had an invoice price of $30,000 and Marco Polo Co. was required to pay shipping $1,200 and insurance during shipping $300 by boat from Nanaimo, B.C. to Latish, Québec.

The machine arrived on January 5, 2017 and was installed at a cost of $800 and calibrated and tested for a cost of $200.

On February 1, 2017 it was put into operation.

Required

a. Prepare a journal entry (or entries) to record all costs associated with the new machine

b. The machine was expected to last 10 years with a salvage value of $2,500. Prepare the journal entry to record depreciation for 2017 and subsequent years using the double-declining balance method of depreciation.

c. Marco Polo Co. sold the machine on July 1, 2020 for $19,000. Prepare all journal entries required related to the machine and its disposal in 2020. Marco Polo Co.'s fiscal year runs from January to December. Round all final answers to the nearest dollar.