Question

In: Accounting

On December 31, 2017, Tamarisk Inc. has a machine with a book value of $1,052,800. The...

On December 31, 2017, Tamarisk Inc. has a machine with a book value of $1,052,800. The original cost and related accumulated depreciation at this date are as follows. Machine $1,456,000 Less: Accumulated depreciation 403,200 Book value $1,052,800 Depreciation is computed at $67,200 per year on a straight-line basis. Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record the transaction. Make sure that depreciation entries are made to update the book value of the machine prior to its disposal. A fire completely destroys the machine on August 31, 2018. An insurance settlement of $481,600 was received for this casualty. Assume the settlement was received immediately. (Credit account titles are automatically indented when 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.) Date Account Titles and Explanation Debit Credit August 31, 2018 (To record current depreciation.) August 31, 2018 (To record loss of the machine.) On April 1, 2018, Tamarisk sold the machine for $1,164,800 to Dwight Yoakam Company. (Credit account titles are automatically indented when 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.) Date Account Titles and Explanation Debit Credit April 1, 2018 (To record current depreciation.) April 1, 2018 (To record sale of the machine.) On July 31, 2018, the company donated this machine to the Mountain King City Council. The fair value of the machine at the time of the donation was estimated to be $1,232,000. (Credit account titles are automatically indented when 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.) Date Account Titles and Explanation Debit Credit July 31, 2018 (To record current depreciation.) July 31, 2018 (To record donation of the machine.)

Solutions

Expert Solution

1 TO RECORD DEPRECIATION UPTO AUG 31, 2018
Particulars Debit Credit
Depreciation A/c                        44,800
           To accumulated depreciation                        44,800
(67200*8/12)
To Record Loss on Sale of Machinery - Aug 31, 2018
Particulars Debit Credit
Accumulated Depreciation                     4,48,000
(403200+44800)
Bank A/c                     4,81,600
Loss on Sale of Machinery                     5,26,400
                     TO Machine A/c                   14,56,000
(Being Insurance claim received and loss on sale booked)
2 To record depreciation on April 01, 2018
Particulars Debit Credit
NO ENTRY
To record sale of machine on April 01, 2018
Particulars Debit Credit
Accumulated Depreciation                     4,03,200
Bank A/c                   11,64,800
                   Profit on Sale of Machinery                     1,12,000
                     TO Machine A/c                   14,56,000
3 TO RECORD DEPRECIATION UPTO July 31, 2018
Particulars Debit Credit
Depreciation A/c                        39,200
           To accumulated depreciation                        39,200
(67200*7/12)
To Record donation of Machinery - july 31, 2018
Particulars Debit Credit
Accumulated Depreciation                     4,42,400
(403200+39200)
Loss on donation of Machinery                   10,13,600
                     TO Machine A/c                   14,56,000
(Being machine donated and loss booked)

Related Solutions

On December 31, 2017, Monty Inc. has a machine with a book value of $996,400. The...
On December 31, 2017, Monty Inc. has a machine with a book value of $996,400. The original cost and related accumulated depreciation at this date are as follows. Machine $1,378,000 Less: Accumulated depreciation 381,600 Book value $996,400 Depreciation is computed at $63,600 per year on a straight-line basis. Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record the transaction. Make sure that depreciation entries are made to update...
On December 31, 2017, Swifty Inc. has a machine with a book value of $1,109,200. The...
On December 31, 2017, Swifty Inc. has a machine with a book value of $1,109,200. The original cost and related accumulated depreciation at this date are as follows. Machine $1,534,000 Less: Accumulated depreciation 424,800 Book value $1,109,200 Depreciation is computed at $70,800 per year on a straight-line basis. Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record the transaction. Make sure that depreciation entries are made to update...
On December 31, 2017, Culver Inc. has a machine with a book value of $1,165,600. The...
On December 31, 2017, Culver Inc. has a machine with a book value of $1,165,600. The original cost and related accumulated depreciation at this date are as follows. Machine $1,612,000 Less: Accumulated depreciation 446,400 Book value $1,165,600 Depreciation is computed at $74,400 per year on a straight-line basis. Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record the transaction. Make sure that depreciation entries are made to update...
On December 31, 2017, Sage Inc. has a machine with a book value of $1,071,600. The...
On December 31, 2017, Sage Inc. has a machine with a book value of $1,071,600. The original cost and related accumulated depreciation at this date are as follows. Machine $1,482,000 Less: Accumulated depreciation 410,400 Book value $1,071,600 Depreciation is computed at $68,400 per year on a straight-line basis. Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record the transaction. Make sure that depreciation entries are made to update...
Exercise 10-24 On December 31, 2017, Oriole Inc. has a machine with a book value of...
Exercise 10-24 On December 31, 2017, Oriole Inc. has a machine with a book value of $1,297,200. The original cost and related accumulated depreciation at this date are as follows. Machine $1,794,000 Less: Accumulated depreciation 496,800 Book value $1,297,200 Depreciation is computed at $82,800 per year on a straight-line basis. Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record the transaction. Make sure that depreciation entries are made...
On December 31, 2020, Carla Inc. has a machine with a book value of $1,334,800. The...
On December 31, 2020, Carla Inc. has a machine with a book value of $1,334,800. The original cost and related accumulated depreciation at this date are as follows. Machine $1,846,000 Less: Accumulated depreciation 511,200 Book value $1,334,800 Depreciation is computed at $85,200 per year on a straight-line basis. Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record the transaction. Make sure that depreciation entries are made to update...
On December 31, 2020, Ivanhoe Inc. has a machine with a book value of $1,297,200. The...
On December 31, 2020, Ivanhoe Inc. has a machine with a book value of $1,297,200. The original cost and related accumulated depreciation at this date are as follows. Machine $1,794,000 Less: Accumulated depreciation 496,800 Book value $1,297,200 Depreciation is computed at $82,800 per year on a straight-line basis. Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record the transaction. Make sure that depreciation entries are made to update...
In alphabetical order below are balance sheet items for Tamarisk, Inc. at December 31, 2017.
In alphabetical order below are balance sheet items for Tamarisk, Inc. at December 31, 2017. Accounts payable $83,200 Accounts receivable 90,880 Cash 28,160 Common stock 23,040 Retained earnings 12,800 Prepare a balance sheet. (List assets in order of liquidity.)
Tamarisk Inc. had the following balance sheet at December 31, 2019. TAMARISK INC. BALANCE SHEET DECEMBER...
Tamarisk Inc. had the following balance sheet at December 31, 2019. TAMARISK INC. BALANCE SHEET DECEMBER 31, 2019 Cash $20,990 Accounts payable $30,990 Accounts receivable 22,190 Notes payable (long-term) 41,990 Investments 32,990 Common stock 100,990 Plant assets (net) 81,000 Retained earnings 24,190 Land 40,990 $198,160 $198,160 During 2020, the following occurred. 1. Tamarisk Inc. sold part of its debt investment portfolio for $15,071. This transaction resulted in a gain of $3,471 for the firm. The company classifies these investments as...
Tamarisk Company has the following securities in its portfolio on December 31, 2017. None of these...
Tamarisk Company has the following securities in its portfolio on December 31, 2017. None of these investments are accounted for under the equity method. Investments Cost Fair Value 1,500 shares of Gordon, Inc., Common $77,600 $73,200 5,000 shares of Wallace Corp., Common 172,900 167,700 400 shares of Martin, Inc., Preferred 63,500 65,100 $314,000 $306,000 All of the securities were purchased in 2017. In 2018, Tamarisk completed the following securities transactions. March 1 Sold the 1,500 shares of Gordon, Inc., Common,...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT