Kenco purchased a new CNC lathe 6 years ago that had an installed cash cost of...

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Kenco purchased a new CNC lathe 6 years ago that had an installed cash cost of $475,000. The lathe was being depreciated over

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Answer 1

Answer #1

Installed Cash cost = $475000
Salvage value = 0
Useful life = 8 years
Annual depreciation amount = Cost/Useful life = 475000/8 = 59375
Value after 6 years = 475000-(59375 X 6) = 118750
Accumulated Depreciation = 59375 X 6=356250
Sale price = $85000

Journal entry
6th year		Debit	Credit
31-Dec	Cash	$85000
	Accumulated depreciation	$356250
	Loss on sale of CNC disposal	$33750
	CNC asset		$475000

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Answer 2

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