Question
In: Accounting
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 | ||
Solutions
ekkarill92 answered 2 years agoRelated Solutions
At the beginning of the year, Young Company bought three used machines from Vince, Inc. The...
At the beginning of the year, Young Company bought three used
machines from Vince, 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
$
8,150
$
26,700
$
10,400
Installation costs
450
850
750
Renovation costs prior to use
2,600
1,250
1,450
Repairs after production began
510
460
600
By the end of the first year,...
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At the beginning of the year, Grillo Industries bought three
used machines from Freeman Incorporated. 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
Cost of the
asset
$
9,300
$
38,500
$
22,300
Installation
costs
950
2,400
1,500
Renovation costs
prior to use
750
2,000
2,500
Repairs after
production began
800
900
1,000
By the end of the first year,...
At the beginning of the year, Grillo Industries bought three used machines from Freeman Incorporated. The...
At the beginning of the year, Grillo Industries bought three
used machines from Freeman Incorporated. 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
Cost of the
asset
$
9,800
$
39,000
$
22,800
Installation
costs
950
2,900
2,000
Renovation costs
prior to use
750
2,500
3,000
Repairs after
production began
500
900
1,500
By the end of the first year,...
At the beginning of the year, Grillo Industries bought three used machines from Freeman Incorporated. The...
At the beginning of the year, Grillo Industries bought three
used machines from Freeman Incorporated. 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
Cost of the asset
$
10,400
$
39,600
$
23,400
Installation costs
1,000
3,500
2,600
Renovation costs prior to use
800
3,100
3,600
Repairs after production began
700
1,000
2,100
By the end of the first year,...
At the beginning of the year, Grillo Industries bought three used machines from Freeman Incorporated. The...
At the beginning of the year, Grillo Industries bought three
used machines from Freeman Incorporated. 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
Cost of the asset
$
9,200
$
38,400
$
22,200
Installation costs
900
2,300
1,400
Renovation costs prior to use
700
1,900
2,400
Repairs after production began
700
800
900
By the end of the first year,...
At the beginning of the year, Grillo Industries bought three used machines from Freeman Incorporated. The...
At the beginning of the year, Grillo Industries bought three
used machines from Freeman Incorporated. 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
Cost of the asset
$
9,600
$
38,800
$
22,600
Installation costs
850
2,700
1,800
Renovation costs prior to use
650
2,300
2,800
Repairs after production began
700
700
1,300
By the end of the first year,...
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recorded separately in the accounts.
Machine A
Machine B
Machine C
Invoice price
paid for asset
$
32,300
$
32,300
$
23,400
Installation
costs
2,300
2,400
1,100
Renovation costs
prior to use
4,000
1,000
1,900
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