$2,464,800 682,560 $1,782,240 Date Account Titles and Explanation Debit Credit (
ID: 2454369 • Letter: #
Question
$2,464,800
682,560
$1,782,240
Date
Account Titles and Explanation
Debit
Credit
(To record current depreciation.)
(To record loss of the machine.)
Date
Account Titles and Explanation
Debit
Credit
(To record current depreciation.)
(To record sale of the machine.)
Date
Account Titles and Explanation
Debit
Credit
(To record current depreciation.)
(To record donation of the machine.)
On December 31, 2014, Travis Tritt Inc. has a machine with a book value of $1,782,240. The original cost and related accumulated depreciation at this date are as follows.Machine
$2,464,800
Less: Accumulated depreciation682,560
Book value$1,782,240
Depreciation is computed at $113,760 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
1)
Date
Account titles and explanation
Debit
Credit
Aug-15
Depreciation
75840
Machinery
75840
(To record the depreciation expense)
Aug-15
Profit and loss account
891120
Loss on machine
891120
(To record the loss of machine)
Working note:
Particulars
Amount
Accumulated depreciation
682560
Add:
Current depreciation
75840
Total depreciation
758400
Cost of machine
2464800
Book value
1706400
Insurance claim
815280
Loss of machine
891120
2)
Date
Account titles and explanation
Debit
Credit
Aug-15
Depreciation
28440
Machinery
28440
(To record the depreciation expense)
Aug-15
Bank
1971840
Machinery
1753800
Profit on sale of machinery
218040
(To record the profit on sale of machine)
Working note on profit on sale of machinery:
Particulars
Amount
Accumulated depreciation
682560
Add:
Current depreciation
28440
Total depreciation
711000
Cost of machine
2464800
Book value
1753800
Sale value
1971840
Profit on sale
218040
Date
Account titles and explanation
Debit
Credit
Aug-15
Depreciation
75840
Machinery
75840
(To record the depreciation expense)
Aug-15
Profit and loss account
891120
Loss on machine
891120
(To record the loss of machine)
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