A Company Purchased and Installed a Machine on January 1,2010,at

question 85

Essay

A company purchased and installed a machine on January 1,2010,at a total cost of $72,000.Straight-line depreciation was calculated based on the assumption of a five-year life and no salvage value.The machine was disposed of on July 1,2013.
a.Prepare the general journal entry to update depreciation to July 1,2013.
b.Prepare the general journal entry to record the disposal of the machine under each of these three independent situations:
(1) The machine was sold for $22,000 cash.
(2) The machine was sold for $15,000 cash.
(3) The machine was totally destroyed in a fire and the insurance company settled the claim for $18,000 cash.

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Definitions:

Unethical

Actions or behavior that do not conform to accepted standards of moral or professional conduct.

Cause-and-Effect

An analysis that explores the reasons for a particular event or situation and the consequences that result from it.

Conventional Pattern

Established or widely recognized methods of organizing information or structuring documents that readers expect.

Cause-and-Effect

A relationship in which one event (the cause) makes another event happen (the effect), often used to explain the reason behind certain outcomes.