At the beginning of the year, Oakmont Company bought three used machines from American Manufacturing, Inc....

At the beginning of the year, Oakmont Company bought three used machines from American Manufacturing, Inc. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts.

	Machine A		Machine B		Machine C
Amount paid for asset	$	21,300	$	11,800	$	11,500
Installation costs		1,150		1,000		300
Renovation costs prior to use		950		800		800
Repairs after production began		320		2,600		680

By the end of the first year, each machine had been operating 4,000 hours.

Required:

Compute the cost of each machine.
Prepare the journal entry to record depreciation expense at the end of year 1, assuming the following:

	Estimates
Machine	Life		Residual Value		Depreciation Method
A	5	years	$	1,600	Straight-line
B	20,000	hours		1,500	Units-of-production
C	10	years		1,500	Double-declining-balance

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ekkarill92 answered 1 year ago

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