Hertzog Company Purchased and Installed a Machine on February 1,2019,at

question 47

Essay

Hertzog Company purchased and installed a machine on February 1,2019,at a total cost of $72,000.Straight-line depreciation was calculated based on the assumption of a five-year life and no residual value.The machine was disposed of on July 31,2022.Assuming the machine was totally destroyed in a fire and the insurance company settled the claim for $18,000 cash,prepare the general journal entry to record the disposal.

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Definitions:

Break-even Point

The level of production at which total revenues equal total expenses, resulting in no profit or loss.

Shutdown Point

The level of production and price point at which a company's revenue from goods sold is equal to the variable cost of production, making operations financially unsustainable in the short term.

Shutdown Point

The level of output and price at which a firm's total revenue is equal to its total variable costs, below which the firm will decide to cease production in the short run.

Break-even Point

The point at which total costs and total revenue are equal, meaning there is no net loss or gain.