Question

im stuck on part 3 jornal entries

Onslow Co. purchased a used machine for $178.000 cash on January 2. On January 3. Onslow paid 4.0 to wire electricity to the machine and an additional S1,100 to ash on January 2. On January 3, Onslow paid $2.840 menine and an additional $1,100 to secure it in place. The machine will be used or six years and have a $14,000 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of. Required Problem 10-6A Disposal of plantas C1 P1 P2 1. Prepare journal entries to record the machine's purchase and the costs to ready it for use. Cantare for all costs incurred. frepare journal entries to record depreciation of the machine at December 31 of (a) its first year of operations and (b) the year of its disposal. 3. Prepare journal entries to record the machine's disposal under each separate situation: (a) it is sold for $15,000 cash; (b) it is sold for $50,000 cash; and (c) it is destroyed in a fire and the insurance company pays $30,000 cash to settle the loss claim. Check (20) Apr $28,000 (30 Or Loss from

Answer 1

Answer-

Journal Entries

Date	Accounts Titles & Explanation	Debit ($)	Credit ($)
January 2	Machinery	178,000
	Cash		178,000
January 3	Machinery	2,840
	Cash		2,840
January 3	Machinery	1,160
	Cash		1,160

Answer 2

Working Note : Depreciation calculation

Cost of Machinery = $178,000 + $2,840 + $1,160 = $182,000

Depreciation = (Cost - Salvage value) / Estimated life = ($182,000 - $14,000) / 6 years

$168,000/ 6 years

= $28,000

Journal Entries

Date	Accounts Titles & Explanation	Debit ($)	Credit ($)
	(a) Its first year in operations.
December 31	Depreciation Expense - Machinery	28,000
	Accumulated Depreciation - Machinery		28,000
	(b) The year of its disposal.
December 31	Depreciation Expense - Machinery	28,000
	Accumulated Depreciation - Machinery		28,000

Answer 3

Journal Entries

Date	Accounts Titles & Explanation	Debit ($)	Credit ($)
	(a) It is sold for $15,000 cash.
	Cash	15,000
	Accumulated Depreciation - Machinery [$28,000 * 5 years]	140,000
	Loss on sale of machinery($182,000-$15,000-$140,000)	27,000
	Machinery		182,000
	(b) It is sold for $50,000 cash.
	Cash	50,000
	Accumulated Depreciation - Machinery ($28,000*5 years)	140,000
	Machinery		182,000
	Gain on sale of machinery ($140,000+$50,000-$182,000)		8,000
	(c) It is destroyed in a fire
	Cash	30,000
	Accumulated Depreciation - Machinery	140,000
	Loss from fire ($182,000-$140,000-$30,000)	12,000
	Machinery		182,000

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