- On March 20 2020 Fine Touch Corporation Purchased Two Machines At Auction For A Combined Total Cost Of 204 000 The M 1 (64.72 KiB) Viewed 40 times
- On March 20 2020 Fine Touch Corporation Purchased Two Machines At Auction For A Combined Total Cost Of 204 000 The M 2 (54.35 KiB) Viewed 40 times
On March 20, 2020, Fine Touch Corporation purchased two machines at auction for a combined total cost of $204,000. The machines were listed in the auction catalogue at $110,000 for machine X and $155,000 for machine Y. Immediately after the auction, FineTouch had the machines professionally appraised so it could increase its insurance coverage. The appraisal put a fair value of $115,150 on machine X and $129,850 on machine Y. On March 24, Fine Touch paid a total of $5,000 in transportation and installation charges for the two machines. No further expenditures were made for machine X, but $7,300 was paid on March 29 for improvements to machine Y. On March 31, 2020, both machines were ready to be used. The
company expects machine X to last five years and to have a residual value of $3,600 when it is removed from service, and it expects machine Y to be useful for eight more years and have a residual value of $15,350 at that time. Due to the different characteristics of the two machines, different depreciation methods will be used for them: machine X will be depreciated using the double-diminishing-balance method and machine Y using the straight-line method. Prepare the journal entry to record the purchase of the machines, indicating the initial cost of each. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round percentage to 1 decimal place, for eg. 40.1 and Round answers to the nearest whole dollar, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts) Date Mar. 20 Account Titles and Explanation Machinery X Machinery Y Cash Debit 95880 108120 Credit 204000
Prepare the journal entries to record the transportation, installation, and improvement costs for each machine. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round percentage to 1 decimal place, for eg 40.1 and Round answers to the nearest whole dollar, eg. 5,275. If no entry is required, select "No Entry for the account titles and enter 0 for the amounts) Date Mar. 24 Mar. 29 Account Titles and Explanation Machinery X Machinery Y Cash Dec. 31 Machinery Y Cash eTextbook and Media List of Accounts Date Account Titles and Explanation Debit 2350 Debit 2650 7300 Credit Prepare the journal entry to record the depreciation expense to December 31, 2020, for each machine. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to the nearest whole dollar, e.g. 5,275. If no entry is required, select "No Entry for the account titles and enter O for the amounts) 5000 Credit 7300