https://edugen.wileyplus.com/edugen/student/mainfr.uni Topic: Chapter 7 PP an X

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https://edugen.wileyplus.com/edugen/student/mainfr.uni Topic: Chapter 7 PP an X Students Homepage x : Mail- smich nment Exercise 10-24 On December 31, 2017, Sarasota Inc. has a machine with a book value of s follows. 1,071,600. The original cost and related accumulated depreciation at this d Machine Less: Accumulated depreciation Book value $1,482,000 410,400 $1,071,600 Depreciation is computed at $68,400 per year on a straight-line basis Presented below is a set of independent situations. For each independent situation, depreciation entries are made to update the book value of the machine prior to its disposal. Indicate the journal entry to be made to record the transaction. M A fire completely destroys the machine on August 31, 2018. An insurance settlement of $490,200 was received for this casualty. Assume the settlem immediately. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required Entry" for the account titles and enter O for the amounts.) Credit Date Account Titles and Explanation August 31, 2018 Depreciation Expense Accumulated Depreciation-Machinery (To record current depreciation.) August 31, 2018 umu

Explanation / Answer

Date Titles Debit   Credit August 31, 2018 Depreciation expense $        45,600 Accumulated depreciation - Machinery $        45,600 (To record current depreciation) August 31, 2018 Cash $     490,200 Accumulated depreciation - Machinery ($410,400+45,600) $     456,000 Loss on fire ($1,482,000-$490,200-$456,000) $     535,800 Machine $ 1,482,000 April 1, 2018 Depreciation expense ($68,400/12*3) $        17,100 Accumulated depreciation - Machinery $        17,100 (To record current depreciation) April 1, 2018 Cash $ 1,185,600 Accumulated depreciation - Machinery ($410,400+17,100) $     427,500 Machine $ 1,482,000 Gain on sale of equipment ($1,185,600+$427,500-$1,482,000) $     131,100 (To record sale of machine) July 31, 2018 Depreciation expense ($68,400/12*7) $        39,900 Accumulated depreciation - Machinery $        39,900 (To record current depreciation) July 31, 2018 Donation expense $ 1,254,000 Accumulated depreciation - Machinery ($410,400+39,900) $     450,300 Machine $ 1,482,000 Gain on transfer of equipment ($1,254,000+450,300-$1,482,000) $     222,300 (To record transfer of machine as donation)

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