Question

On December 31, 2020, Sweet Inc. has a machine with a book value of $1,203,200. The...

On December 31, 2020, Sweet Inc. has a machine with a book value of $1,203,200. The original cost and related accumulated depreciation at this date are as follows.
Machine

$1,664,000

Less: Accumulated depreciation

460,800

Book value

$1,203,200


Depreciation is computed at $76,800 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 the book value of the machine prior to its disposal.

(c)

On July 31, 2021, 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 $1,408,000. (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, 2021 enter an account title to record current depreciation enter a debit amount enter a credit amount
enter an account title to record current depreciation enter a debit amount enter a credit amount

(To record current depreciation.)

July 31, 2021 enter an account title to record donation of the machine enter a debit amount enter a credit amount
enter an account title to record donation of the machine enter a debit amount enter a credit amount
enter an account title to record donation of the machine enter a debit amount enter a credit amount
enter an account title to record donation of the machine enter a debit amount enter a credit amount

(To record donation of the machine.)

Homework Answers

Answer #1

Solution:

Date Account Titles and Explanation Debit Credit
July. 31, 2021 Depreciation Expenses [76800*7/12] $                44,800
Accumulated Depreciation $          44,800
[To record current depreciation]
July. 31, 2021 Accumulated Depreciation [460800+44800] $              505,600
Contribution Expense [Donation] $          1,408,000
Gain on disposal of machine $        249,600
Machine $    1,664,000
[To record donation of the machine]
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
On December 31, 2020, Sweet Inc. has a machine with a book value of $1,203,200. The...
On December 31, 2020, Sweet Inc. has a machine with a book value of $1,203,200. The original cost and related accumulated depreciation at this date are as follows. Machine $1,664,000 Less: Accumulated depreciation 460,800 Book value $1,203,200 Depreciation is computed at $76,800 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, 2020, Martinez Inc. has a machine with a book value of $1,391,200. The...
On December 31, 2020, Martinez Inc. has a machine with a book value of $1,391,200. The original cost and related accumulated depreciation at this date are as follows. Machine $1,924,000 Less: Accumulated depreciation 532,800 Book value $1,391,200 Depreciation is computed at $88,800 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, Cullumber Inc. has a machine with a book value of $ 1,222,000....
On December 31, 2017, Cullumber Inc. has a machine with a book value of $ 1,222,000. The original cost and related accumulated depreciation at this date are as follows. Machine $ 1,690,000 Less: Accumulated depreciation 468,000 Book value $ 1,222,000 Depreciation is computed at $ 78,000 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...
On December 31, 2020, Culver Inc. has a machine with a book value of $958,800. The...
On December 31, 2020, Culver Inc. has a machine with a book value of $958,800. The original cost and related accumulated depreciation at this date are as follows. Machine $1,326,000 Less: Accumulated depreciation 367,200 Book value $958,800 Depreciation is computed at $61,200 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...
Presented below is information related to equipment owned by Waterway Company at December 31, 2020. Cost...
Presented below is information related to equipment owned by Waterway Company at December 31, 2020. Cost $10,710,000 Accumulated depreciation to date 1,190,000 Expected future net cash flows 8,330,000 Fair value 5,712,000 Waterway intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $23,800. As of December 31, 2020, the equipment has a remaining useful life of 4 years. Prepare the journal entry (if any) to record the impairment of the...
On July 31, 2021, Crane Inc. issued $490,000 of 5-year, 4% bonds at 104. Interest is...
On July 31, 2021, Crane Inc. issued $490,000 of 5-year, 4% bonds at 104. Interest is payable semi-annually on July 31 and January 31. Crane’s fiscal year end is January 31. Is the market rate of interest higher or lower than 4%? The market rate of interest is select an option 2) Record the issue of the bonds on July 31, 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry...
Bramble Company has an old factory machine that cost $42,000. The machine has accumulated depreciation of...
Bramble Company has an old factory machine that cost $42,000. The machine has accumulated depreciation of $23,520. Bramble has decided to sell the machine. (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.) (a) What entry would Bramble make to record the sale of the machine for $20,520 cash? (b) What entry would Bramble make to record...
On January 1, 2020, Coronado Company purchased 12% bonds, having a maturity value of $287,000 for...
On January 1, 2020, Coronado Company purchased 12% bonds, having a maturity value of $287,000 for $308,758.85. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Coronado Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows....
Exercise 12-13 Presented below is information related to copyrights owned by Crane Company at December 31,...
Exercise 12-13 Presented below is information related to copyrights owned by Crane Company at December 31, 2020. Cost $8,530,000 Carrying amount 4,260,000 Expected future net cash flows 3,930,000 Fair value 3,580,000 Assume that Crane Company will continue to use this copyright in the future. As of December 31, 2020, the copyright is estimated to have a remaining useful life of 10 years. A.) Prepare the journal entry to record the impairment of the asset at December 31, 2020. The company...
The following information is for a copyright owned by Flounder Corp., a private entity, at December 31, 2020.
The following information is for a copyright owned by Flounder Corp., a private entity, at December 31, 2020. Flounder Corp. applies ASPE.Cost$4,305,000Carrying amount2,149,000Expected future net cash flows (undiscounted)2,014,000Fair value1,671,000Assume that Flounder Corp. will continue to use this copyright in the future. As at December 31, 2020, the copyright is estimated to have a remaining useful life of 8 years.Prepare the journal entry, if any, to record the asset’s impairment at December 31, 2020. (Credit account titles are automatically indented when...