Ex. 282
PurchaseUsefulResidualDepreciationSales
Machine Cost Date Life Value Method Date Sold Price
#1€88,0007/1/105 yrs.€8,000Straight-line7/1/14€20,000
#2€70,0007/1/135 yrs.€7,500Double-declining-12/31/14€42,000
balance
Instructions
(a)Compute the depreciation on each machine to the date of disposal.
(b)Prepare the journal entries in 2014 to record 2014 depreciation and the sale of each machine.
Ex. 283
Presented below are selected transactions for Corbin Company for 2014.
Jan.1Received $3,000 scrap value on retirement of machinery that was purchased on January 1, 2003. The machine cost $90,000 on that date, and had a useful life of 10 years with no residual value.
April30Sold a machine for $31,000 that was purchased on January 1, 2011. The machine cost $90,000, and had a useful life of 5 years with no residual value.
Dec.31Discarded a business automobile that was purchased on April 1, 2010. The car cost $42,000 and was depreciated on a 5-year useful life with a residual value of $2,000.
Instructions
Journalize all entries required as a result of the above transactions. Corbin Company uses the straight-line method of depreciation and has recorded depreciation through December 31, 2013.
Solution 283(15 min.)