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$1,534,000 424,800 $1,109,200 Date Account Titles and Explanation Debit Credit (

ID: 2525606 • Letter: #

Question

$1,534,000

424,800

$1,109,200

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.)

SHOW LIST OF ACCOUNTS

LINK TO TEXT

Date

Account Titles and Explanation

Debit

Credit

(To record current depreciation.)

On December 31, 2017, Riverbed Inc. has a machine with a book value of $1,109,200. The original cost and related accumulated depreciation at this date are as follows.
Machine

$1,534,000

Less: Accumulated depreciation

424,800

Book value

$1,109,200


Depreciation is computed at $70,800 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

Case-1: Insurance settlment received Date Account titles and explanation Debit Credit 31-Aug-18 Depreciation Expense (8/12 X $70800) $47,200 Accumulated Depreciation—Machinery $47,200 To Record Current Depreciation 31-Aug-18 Cash $507,400 Accumulated Depreciation—Machinery ($424800 + $47200) $472,000 Loss on Disposal of Machinery( Bal. Fig) $554,600 Machine $1,534,000 To Record Sale of Machine Case-2: Machine sold to Yoklam Company Date Account titles and explanation Debit Credit 01-Apr-18 Depreciation Expense (3/12 X $70800) $17,700 Accumulated Depreciation—Machinery $17,700 To Record Current Depreciation 01-Apr-18 Cash $1,227,200 Accumulated Depreciation—Machinery ($424800 + $17700) $442,500 Machine $1,534,000 Gain on Disposal of Machinery( Bal. Fig) $135,700 To Record Sale of Machine Case-3: Machine donated Date Account titles and explanation Debit Credit 31-Jul-18 Depreciation Expense (7/12 X $70800) $41,300 Accumulated Depreciation—Machinery $41,300 To Record Current Depreciation 31-Jul-18 Contribution Expense $1,298,000 Accumulated Depreciation—Machinery ($424800 + $41300) $466,100 Machine $1,534,000 Gain on Disposal of Machinery( Bal. Fig) $230,100 To Record donation of Machine