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The cash price of this machine was $48,000. Related expenditures included: sales tax $1,700, shipping costs $150, insurance during shipping $80, installation and testing costs $70, and $100 of oil and lubricants to be used with the machinery during its fi

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Problem 10-3A On January 1, 2014, Evers Company purchased the following two machines for use in its production process.;Machine A: The cash price of this machine was $48,000. Related expenditures included: sales tax $1,700, shipping costs $150, insurance during shipping $80, installation and testing costs $70, and $100 of oil and lubricants to be used with the machinery during its first year of operations. Evers estimates that the useful life of the machine is 5 years with a $5,000 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used.;Machine B: The recorded cost of this machine was $180,000. Evers estimates that the useful life of the machine is 4 years with a $10,000 salvage value remaining at the end of that time period.;Prepare the following for Machine A. (Round answers to 0 decimal places, e.g. $2,125. Credit account titles are automatically indented when amount is entered. Do not indent manually.);1. The journal entry to record its purchase on January 1, 2014.;2. The journal entry to record annual depreciation at December 31, 2014.;No. Account Titles and Explanation Debit Credit;1.;2.;SHOW LIST OF ACCOUNTS SHOW SOLUTION;Calculate the amount of depreciation expense that Evers should record for machine B each year of its useful life under the following assumptions. (Round depreciation cost per unit to 2 decimal places, e.g. 12.25. Round final answers to 0 decimal places, e.g. $2,125.);(1) Evers uses the straight-line method of depreciation.;(2) Evers uses the declining-balance method. The rate used is twice the straight-line rate.;(3) Evers uses the units-of-activity method and estimates that the useful life of the machine is 125,000 units. Actual usage is as follows: 2014, 45,000 units, 2015, 35,000 units, 2016, 25,000 units, 2017, 20,000 units.;2014 2015 2016 2017;Straight-line method $ $ $ $;Declining-balance method $ $ $ $;Units-of-activity method $ $ $ $;Click if you would like to Show Work for this question

 

Paper#76807 | Written in 18-Jul-2015

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