Question
In: Accounting
Smirk Co. purchased machinery on July 1, 2016 for $68,000, and intends to use the machinery...
Smirk Co. purchased machinery on July 1, 2016 for $68,000, and intends to use the machinery for 10 years. After 10 years, Smirk estimates the machinery will sell for $3,000. Smirk will use the revaluation model to account for machinery. The fair value of machinery on December 31, 2019 (the first revaluation date) is $50,000.
Required
(a) If Smirk uses the double diminishing balance method to calculate depreciation, calculate depreciation expense for 2016
(b) Assuming Smirk uses the straight-line method for depreciation, prepare all necessary journal entries relating to the machinery at December 31, 2019.
(c) On July 1, 2020, Smirk gets a great deal on some new machinery and sells its old machinery for $45,000 cash. Prepare all journal entries necessary at July 1, 2020 relating to its old machinery (i.e. ignoring the recognition of its new machinery).
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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On July 1, 2016, Crane Company sells machinery for $210500. The
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Freedom Co. purchased
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Required:
a-1.
Calculate the depreciation expense for each year of the asset's
life using Straight-line depreciation.
Year
Depreciation Expense
1
$8,460
2
$8,460
3
$8,460
4
$8,460
5
$8,460
a-2.
Calculate the depreciation expense for each year of the asset's
life using Double-declining-balance depreciation.
Year
Depreciation Expense...
Shamrock Cosmetics Co. purchased machinery on December 31, 2016, paying $45,000 down and agreeing to pay...
Shamrock Cosmetics Co. purchased machinery on December 31, 2016,
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installments of $45,600 payable each December 31. An assumed
interest of 8% is implicit in the purchase price.
Prepare the journal entries that would be recorded for the purchase
and for (1) the payments and (2) interest on the following dates.
(Round answers to 0 decimal places, e.g. 38,548. If no
entry is required, select "No Entry" for the...
Blossom Cosmetics Co. purchased machinery on December 31, 2016, paying $48,000 down and agreeing to pay...
Blossom Cosmetics Co. purchased machinery on December 31, 2016,
paying $48,000 down and agreeing to pay the balance in four equal
installments of $47,200 payable each December 31. An assumed
interest of 9% is implicit in the purchase price.
Prepare the journal entries that would be recorded for the purchase
and for (1) the payments and (2) interest on the following dates.
(Round answers to 0 decimal places, e.g. 38,548. If no
entry is required, select "No Entry" for the...
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Ltd uses the cost model to measure items of property, plant and
equipment and the straight-line method of depreciation. Blenheim
Ltd has a 30 June reporting date.
In relation to the item of machinery, Blenheim Ltd has
identified indicators of impairment for the reporting...
On 1 July 2017, Blenheim Ltd purchased an item of machinery for $280,000. On this date...
On 1 July 2017, Blenheim Ltd purchased an item of machinery for
$280,000. On this date it was estimated that the item of machinery
had a useful life of seven years and zero residual value. Blenheim
Ltd uses the cost model to measure items of property, plant and
equipment and the straight-line method of depreciation. Blenheim
Ltd has a 30 June reporting date.
In relation to the item of machinery, Blenheim Ltd has
identified indicators of impairment for the reporting...
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On 1 July 2017, Blenheim Ltd purchased an item of machinery for
$280,000. On this date it was estimated that the item of machinery
had a useful life of seven years and zero residual value. Blenheim
Ltd uses the cost model to measure items of property, plant and
equipment and the straight-line method of depreciation. Blenheim
Ltd has a 30 June reporting date. In relation to the item of
machinery, Blenheim Ltd has identified indicators of impairment for
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1. Watt Co. purchased $300,000 of bonds for $315,000. If Watt intends to hold the securities...
1. Watt Co. purchased $300,000 of bonds for $315,000. If
Watt intends to hold the securities to maturity, the entry to
record the purchase of the investment includes
A credit to Investments in bonds at $300,000.
A credit to Discount on Investments of $15,000.
A credit to Cash at $300,000.
A credit to Cash at $315,000.
2. When a product or service is delivered for which a
customer advance has been previously received, the appropriate
journal entry includes:
A. A...
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