On January 1, 2021, Gravy Corporation purchased a machine having an invoice price of $19,000. On...

 

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On January 1, 2021, Gravy Corporation purchased a machine having an invoice price of $19,000. On January 3rd, the company incurred transportation and installation costs totaling $1,000. The machine is estimated to have a 6-year useful life and a $2,000 residual value. Required: 1. Create a depreciation schedule using straight line depreciation showing the depreciation expense, accumulated depreciation balance, and book value balance for each year. a. What is the total amount booked to the Equipment asset account for the purchase in January? b. What is the amount is expensed each year for Depreciation? 2. Create the journal entries to record the purchase, transportation and installation costs and the depreciation expense as of December 31, 2021. On January 1, 2021, Gravy Corporation purchased a machine having an invoice price of $19,000. On January 3rd, the company incurred transportation and installation costs totaling $1,000. The machine is estimated to have a 6-year useful life and a $2,000 residual value. Required: 1. Create a depreciation schedule using straight line depreciation showing the depreciation expense, accumulated depreciation balance, and book value balance for each year. a. What is the total amount booked to the Equipment asset account for the purchase in January? b. What is the amount is expensed each year for Depreciation? 2. Create the journal entries to record the purchase, transportation and installation costs and the depreciation expense as of December 31, 2021.

Answer rating: 100% (QA)

Answer Cost of Machine 19000 Add Installation costs 1000 Total cost of machine 20000 Less Salvah... View the full answer