Alatorre Corporation, which manufactures shoes, hired a recent college graduate
ID: 2380176 • Letter: A
Question
Alatorre Corporation, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day of work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the accountant, who had never before seen such a machine, managed to break the machine. Alatorre Corporation gave the machine plus $330 to Mills Business Machine Company (dealer) in exchange for a new machine. Assume the following information about the machines.
Alatorre Corp.(Old Machine) Mills Co.
(New Machine)
Machine cost $299 $278 Accumulated depreciation 144
Explanation / Answer
THe entry for the Alatorre corp is as follows:
Machinery Dr. 417
Accum. depr. machinery Dr. 144
Losson disposal of old machinery Dr. 68
Machinery Cr. 299
Cash Cr. 330
THe next journal entry is for MILLS CORP.
Cash Dr. 330
Merchandise Dr. 87
Cost of good sold Dr. 278
Merchandise Cr. 278
Sale Cr.417
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