Yukon Productions Corp. purchased equipment on March 1, 2015, for $77,000. The c

Question

Yukon Productions Corp. purchased equipment on March 1, 2015, for $77,000. The company estimated the equipment wouid have a usefui life of three years and produce 12,000 units, with a residual value of $8,300. Dunng 2o1s, the equipment produced 4,900 units. On November 30, 2016, the machine was sold for $19,000 and had produced 5,600 units that year years ended December 31, 2015 and 20 ia, the Record all the necessary entries for manuaily. If no entry is required dee un-eac (Ondit nt netes ae automatkaay manted--the mounts 00 ool units-of-production depreciatien methed to 2 decimal placex e-9. 225 and final anewers te o decimal places 3 (1) Straight-in To recard the sale of machine)

Explanation / Answer

Answer 1. Straight Line Journal Entry Date Particulars Dr. Amt. Cr. Amt. 1-Mar-15 Equipment        77,000.00    Cash        77,000.00 (To record the purcahse of Equipment) 31-Dec-15 Depreciation Expense        19,083.00    Accumulated Depreciation - Equipment        19,083.00 (To record the depreciation expense) Depreciation Expense per annum = ($77,000 - $8,300) / 3 Years Depreciation Expense per annum = $22,900 Depreciation Expense - 2015 = $22,900 X 10/12 = $19,083 (Approx.) 30-Nov-16 Depreciation Expense        20,992.00    Accumulated Depreciation - Equipment        20,992.00 (To record the depreciation expense) Depreciation Expense - 2016 = $22,900 X 11/12 = $20,992 (Approx.) 30-Nov-16 Cash        19,000.00 Accumulated Depreciation - Equipment        40,075.00 Loss on Sale of Equipment        17,925.00    Equipment        77,000.00 (To record the sale of equipment) Answer 2. Single Diminishing Balance Method Journal Entry Date Particulars Dr. Amt. Cr. Amt. 1-Mar-15 Equipment        77,000.00    Cash        77,000.00 (To record the purcahse of Equipment) 31-Dec-15 Depreciation Expense        21,389.00    Accumulated Depreciation - Equipment        21,389.00 (To record the depreciation expense) Depreciation Expense - 2015 = $77,000 X 33.33% X 10/12 = $21,389 (Approx.) 30-Nov-16 Depreciation Expense        16,992.00    Accumulated Depreciation - Equipment        16,992.00 (To record the depreciation expense) Depreciation Expense - 2016 = ($77,000 - $21,389) X 33.33% X X 11/12 = $16,992 (Approx.) 30-Nov-16 Cash        19,000.00 Accumulated Depreciation - Equipment        38,381.00 Loss on Sale of Equipment        19,619.00    Equipment        77,000.00 (To record the sale of equipment) Answer 3. Units of Production Method Journal Entry Date Particulars Dr. Amt. Cr. Amt. 1-Mar-15 Equipment        77,000.00    Cash        77,000.00 (To record the purcahse of Equipment) 31-Dec-15 Depreciation Expense        28,053.00    Accumulated Depreciation - Equipment        28,053.00 (To record the depreciation expense) Depreciation Rate per Unit = ($77,000 - $8,300) / 12,000 Units = $5.73 per Unit (Approx.) Depreciation Expense - 2015 = $5.73 X 4,900 Units = $28,053 (Approx.) 30-Nov-16 Depreciation Expense        32,060.00    Accumulated Depreciation - Equipment        32,060.00 (To record the depreciation expense) Depreciation Expense - 2016 = $5.73 X 5,600 Units = $32,060 30-Nov-16 Cash        19,000.00 Accumulated Depreciation - Equipment        60,113.00    Equipment        77,000.00    Gain on Sale of Equipment          2,113.00 (To record the sale of equipment)

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