On December 31, 2014, Travis Tritt Inc. has a machine with a book value of $1,51
ID: 2474324 • Letter: O
Question
On December 31, 2014, Travis Tritt Inc. has a machine with a book value of $1,517,160. The original cost and related accumulated depreciation at this date are as follows. Machine $2,098,200 Less: Accumulated depreciation 581,040 Book value $1,517,160 Depreciation is computed at $96,840 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.
A fire completely destroys the machine on August 31, 2015. An insurance settlement of $694,020 was received for this casualty. Assume the settlement was received immediately. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
On April 1, 2015, Tritt sold the machine for $1,678,560 to Dwight Yoakam Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
On July 31, 2015, the company donated this machine to the Mountain King City Council. The fair value of the machine at the time of the donation was estimated to be $1,775,400. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Explanation / Answer
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DATE ACCOUNT TITLE DEBIT $ CREDIT $ AUG 31, 2015 DEPRICIATION 64560 ACCUMULATED DEPRICIATION 64560 (TO RECORD CURRENT DEPERICATION) AUG 31, 2015 CASH 694020 ACCUMULATED DEPERICATION 645600 LOSS ON DISPOSAL OF MACHINARY 758580 MACHINARY 2098200 (TO RECORD LOSS OF THE MACHINARY)Related Questions
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