Question
In: Accounting
Blossom Productions Corp. purchased equipment on March 1, 2018, for $ 75,000. The company estimated the...
Blossom Productions Corp. purchased equipment on March 1, 2018, for $ 75,000. The company estimated the equipment would have a useful life of three years and produce 12,000 units, with a residual value of $ 7,600. During 2018, the equipment produced 4,900 units. On November 30, 2019, the machine was sold for $ 19,000 and had produced 5,700 units that year.
a. Record all the necessary entries for the years ended December 31, 2018, and 2019, using the following depreciation methods: (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round the depreciation rate in the double-diminishing-balance method to the nearest whole percent, e.g. 43% and round depreciation per unit in the units-of-production depreciation method to 2 decimal places, e.g. 2.25 and final answers to 0 decimal places, e.g. 5,275.)
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Nov. 30 |
(1) Straight-line
|
Solutions
Expert Solution
| (1) Straight-line | |||
| 2018 | Debit | Credit | |
| 01-Mar-18 | Equipment | $ 75,000.00 | |
| Cash | $ 75,000.00 | ||
| For the Purchase of Equipment | |||
| 31-Dec-18 | Depreciation Expense | $ 22,467.00 | |
| Accumulated Depreciation | $ 22,467.00 | ||
| (75000-7600)/3 | |||
| To Record Depreciation Expense | |||
| 2019 | |||
| 30-11-2018 | Depreciation Expense | $ 20,595.00 | |
| Accumulated Depreciation | $ 20,595.00 | ||
| 22467*11/12 | |||
| To Record Depreciation Expense | |||
| 30-11-2018 | Cash | $ 19,000.00 | |
| Accumulated Depreciation | $ 43,062.00 | ||
| Loss | $ 12,938.00 | ||
| Equipment | $ 75,000.00 | ||
| To record the sale of machine | |||
2)
| Double-diminishing-balance | |||
| 2018 | Debit | Credit | |
| 01-Mar-18 | Equipment | $ 75,000.00 | |
| Cash | $ 75,000.00 | ||
| For the Purchase of Equipment | |||
| 31-Dec-18 | Depreciation Expense | $ 50,250.00 | |
| Accumulated Depreciation | $ 50,250.00 | ||
| 75000*67% | |||
| To Record Depreciation Expense | |||
| 2019 | |||
| 30-11-2018 | Depreciation Expense | $ 15,200.00 | |
| Accumulated Depreciation | $ 15,200.00 | ||
| (75000-50250)*67%*11/12 | |||
| To Record Depreciation Expense | |||
| 30-11-2018 | Cash | $ 19,000.00 | |
| Accumulated Depreciation | $ 65,450.00 | ||
| Gain | $ 9,450.00 | ||
| Equipment | $ 75,000.00 | ||
| To record the sale of machine | |||
| (3) Units-of-Production | |||
| 2018 | Debit | Credit | |
| 01-Mar-18 | Equipment | $ 75,000.00 | |
| Cash | $ 75,000.00 | ||
| For the Purchase of Equipment | |||
| 31-Dec-18 | Depreciation Expense | $ 30,625.00 | |
| Accumulated Depreciation | $ 30,625.00 | ||
| 75000/12000*4900 | |||
| To Record Depreciation Expense | |||
| 2019 | |||
| 30-11-2018 | Depreciation Expense | $ 35,625.00 | |
| Accumulated Depreciation | $ 35,625.00 | ||
| 75000/12000*5700 | |||
| To Record Depreciation Expense | |||
| 30-11-2018 | Cash | $ 19,000.00 | |
| Accumulated Depreciation | $ 66,250.00 | ||
| Gain | $ 10,250.00 | ||
| Equipment | $ 75,000.00 | ||
| To record the sale of machine | |||
ekkarill92 answered 1 year agoRelated Solutions
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