Required information P8-3 Computing the Acquisition Cost and Recording Depreciation under Three Alternative Methods L08- 2,8-3 [The following information applies to the questions displayed below) At the beginning of the year, Plummer's Sports Center bought three used fitness machines from Advantage, Inc. The machines immediately were overhauled, installed, and started operating. The machines were different; therefore, each had to be recorded separately in the accounts. Amount paid for annet Installation costa Renovation costs prior to use Machine A Machine B. $ 27,200 $ 34,000 1,500 1,400 2,900 1,400 Machinec $ 22,300 1,000 1,900 By the end of the first year, each machine had been operating 6,200 hours. P8-3 Part 2 2. Prepare the entry to record depreciation expense at the end of year 1, assuming the following (if no entry is required for a transaction/event, select "No journal entry required" in the first account field.) ESTIMATES Residual Depreciation Method Machine Lite Value 7 years $1,500 straight-line 69,000 2.300 Units-of-production hours c 9 years 2,200 Double-declining-balance 13 Required information P8-6 Recording and Interpreting the Disposal of Three Long-Lived Assets LO8-3, 8-5 [The following information applies to the questions displayed below.) During the current year, Merkley Company disposed of three different assets. On January 1 of the current year, prior to their disposal, the accounts reflected the following: Accumulated Original Residual Estimated Depreciation Asset Cont Value Life (straight line) Machine A $ 36,000 3,000 6 years $ 22,000 (4 years) Machine B 73,000 4,000 8 years 51,750 (6 years) Machine C 76,500 6,600 16 years 52,425 (12 years) $ The machines were disposed of in the following ways: a Machine A: Sold on January 1 for $13,500 cash. b, Machine B: Sold on December 31 for $13,325; received cash $2,300, and a $11,025 Interest-bearing (12 percent) note receivable due at the end of 12 months c. Machine C On January 1, this machine suffered irreparable damage from an accident. On January 10, a salvage company removed the machine at no cost. P8-6 Part 1 Required: 1. Give all journal entries related to the disposal of each machine in the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) In My Maputery [The following information applies to the questions displayed below) During the current year, Merkley Company disposed of three different assets. On January 1 of the current year, prior to their disposal, the accounts reflected the following: Asset Machine A Machine B Machine C Original Cost $ 36,000 73,000 76,500 Residual Estimated Value Life $ 3,000 6 years 4,000 6,600 16 years Accumulated Depreciation (straight line) $ 22,000 (4 years) 51,750 (6 years) 52,425 (12 years) 8 years The machines were disposed of in the following ways: a Machine A Sold on January 1 for $13,500 cash. b. Machine B: Sold on December 31 for $13,325; received cash, $2,300, and a $11.025 interest-bearing (12 percent) note receivable due at the end of 12 months c. Machine C: On January 1, this machine suffered irreparable damage from an accident. On January 10, a salvage company removed the machine at no cost. P8-6 Part 2 2. Explain the accounting rationale for the way that you recorded each disposal. Machine A Disposal of a long-Uved asset with the price below net book value results in a Machine B: Disposal of a long-lived asset with the price above net book value results in a Machine Disposal of a long-lived asset due to damage results in a remaining book value