Question

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 the book value of the machine prior to its disposal.

a)A fire completely destroys the machine on August 31, 2021. An insurance settlement of $438,600 was received for this casualty. Assume the settlement was received immediately

B)On April 1, 2021, Culver sold the machine for $1,060,800 to Yoakam Company

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 $1,122,000

Homework Answers

Answer #1

a) Journal entry

Date General Journal Debit Credit
Aug 31 Depreciation expense (61200/12*8) 40800
Accumulated depreciation-machine 40800
Aug 31 Cash 438600
Accumulated depreciation-machine (367200+40800) 408000
Loss on disposal of machine 479400
Machine 1326000

b) Journal entry

Date General Journal Debit Credit
Apr 1 Depreciation expense (61200/12*3) 15300
Accumulated depreciation-machine 15300
Apr 1 Cash 1060800
Accumulated depreciation-machine (367200+15300) 382500
Gain on disposal of machine 117300
Machine 1326000

c) Journal entry

Date General Journal Debit Credit
Jul 31 Depreciation expense (61200/12*7) 35700
Accumulated depreciation-machine 35700
Accumulated depreciation-machine (367200+35700) 402900
Loss on disposal of machine 923100
Machine 1326000
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, 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...
1. Tony Tools Company has a December 31 year end. The company received its property tax...
1. Tony Tools Company has a December 31 year end. The company received its property tax bill for 2021 on March 1, 2021. According to the bill, taxes of $24,000 for the year ended December 31, 2021 are due by April 30, 2021. On March 1, Tony will record property tax expense of $12,000. $8,000. $24,000. $4,000. 2. Beaches Ltd. reviews its assets every fiscal year for potential asset impairments. In the current year Beaches realized through its impairment assessment...
Marks] 3. On December 31, 2017, Laser Inc. acquired a machine from Rocky Corporation by issuing...
Marks] 3. On December 31, 2017, Laser Inc. acquired a machine from Rocky Corporation by issuing a $600,000, non–interest-bearing note that is payable in full on December 31, 2021. The company’s credit rating permits it to borrow funds from its several lines of credit at 10%. The machine is expected to have a five-year life and a $70,000 residual value. (a) Calculate the value of the note and prepare the journal entry for the purchase on December 31, 2017. [2...
Asha Inc.’s financial statements for its year ended December 31, 20X8, follow: Asha Inc.   Statement of...
Asha Inc.’s financial statements for its year ended December 31, 20X8, follow: Asha Inc.   Statement of financial position   as at December 31, 20X8 20X8 20X7 Assets Cash and cash equivalent $94,000 $123,000 Accounts receivable (net) 114,000 111,500 FVOCI investments 15,000 12,000 Inventory 69,000 73,800 Prepaid expenses 15,000 11,700 Property, plant, and equipment (PPE), net 622,000 425,000 Trademark 48,000 63,000 $977,000 $820,000 Liabilities and shareholder equity Accounts payable $62,100 $57,500 Income taxes payable 21,100 19,000 Dividends payable 15,000 18,000 Bank loan...
Asha Inc.’s financial statements for its year ended December 31, 20X8, follow: Asha Inc.   Statement of...
Asha Inc.’s financial statements for its year ended December 31, 20X8, follow: Asha Inc.   Statement of financial position   as at December 31, 20X8 20X8 20X7 Assets Cash and cash equivalent $94,000 $123,000 Accounts receivable (net) 114,000 111,500 FVOCI investments 15,000 12,000 Inventory 69,000 73,800 Prepaid expenses 15,000 11,700 Property, plant, and equipment (PPE), net 622,000 425,000 Trademark 48,000 63,000 $977,000 $820,000 Liabilities and shareholder equity Accounts payable $62,100 $57,500 Income taxes payable 21,100 19,000 Dividends payable 15,000 18,000 Bank loan...
Asha Inc.’s financial statements for its year ended December 31, 20X8, follow: Asha Inc.   Statement of...
Asha Inc.’s financial statements for its year ended December 31, 20X8, follow: Asha Inc.   Statement of financial position   as at December 31, 20X8 20X8 20X7 Assets Cash and cash equivalent $94,000 $123,000 Accounts receivable (net) 114,000 111,500 FVOCI investments 15,000 12,000 Inventory 69,000 73,800 Prepaid expenses 15,000 11,700 Property, plant, and equipment (PPE), net 622,000 425,000 Trademark 48,000 63,000 $977,000 $820,000 Liabilities and shareholder equity Accounts payable $62,100 $57,500 Income taxes payable 21,100 19,000 Dividends payable 15,000 18,000 Bank loan...