On December 31, 2017, Pina Inc. has a machine with a book value of $1,165,600. T

Question

On December 31, 2017, Pina Inc. has a machine with a book value of $1,165,600. The original cost and related accumulated depreciation at this date are as follows. Machine Less: Accumulated depreciation Book value $1,612,000 446,400 $1,165,600 Depreciation is computed at $74,400 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, 2018. An insurance settlement of $533,200 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.) Date Account Titles and Explanation Debit Credit August 31, 2018 (To record current depreciation.) August 31, 2018 To record loss of the machine.)

Explanation / Answer

SOLUTION

(A)

(B)

(C)

Date Accounts title and Explanation Debit ($) Credit ($) Aug.31,2018 Depreciation expense ($74,400*8/12) 49,600 Accumulated depreciation - Machine 49,600 (To record current depreciation) Aug.31,2018 Cash 533,200 Accumulated depreciation-Machine ($446,400 + $49,600) 496,000 Loss on disposal of machine 582,800 Machine 1,612,000 (To record loss of machine)

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.