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$1,846,000 511,200 $1,334,800 Date Account Titles and Explanation Debit Credit (

ID: 2437685 • Letter: #

Question

$1,846,000

511,200

$1,334,800

Date

Account Titles and Explanation

Debit

Credit

(To record current depreciation.)

(To record loss of the machine.)

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Date

Account Titles and Explanation

Debit

Credit

(To record current depreciation.)

(To record sale of the machine.)

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Date

Account Titles and Explanation

Debit

Credit

(To record current depreciation.)

(To record donation of the machine.)

On December 31, 2017, Wildhorse Inc. has a machine with a book value of $1,334,800. The original cost and related accumulated depreciation at this date are as follows.
Machine

$1,846,000

Less: Accumulated depreciation

511,200

Book value

$1,334,800


Depreciation is computed at $85,200 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.

Explanation / Answer

Date Account titles & Explanations Debit Credit 8/31/2018 Depreciation expense 56800 Accumulated Depreciation 56800 (85,200/12)*8 8/31/2018 Cash 610,600 Accumulated depreciation 568000 loss on disposal 667,400 Machine 1,846,000 Date Account titles & Explanations Debit Credit 4/1/2018 Depreciation expense 21300 Accumulated Depreciation 21300 (85,200/12)*3 4/1/2018 Cash 1,476,800 Accumulated depreciation 532500 Gain on disposal 163,300 Machine 1,846,000 Date Account titles & Explanations Debit Credit 7/31/2018 Depreciation expense 49700 Accumulated Depreciation 49700 (85,200/12)*7 4/1/2018 Contribution expense 1,562,000 Accumulated depreciation 560900 Gain on disposal 276,900 Machine 1,846,000