Accounting Question on Fixed Assets Depreciation

Posted on 2013-12-03 15:13:00 in Accounting by SACHIN

At the beginning of the year, Chemical Control Corporation bought three used machines from Radial Compression Incorporated. The machines immediately were overhauled, installed, and started operating. Because the machines were different, each was recorded separately in the accounts.



Machine A Machine B Machine C

Cost of the asset $19,000 $27,810 $22,000

Installation costs 3,600 5,100 2,400

Renovation costs prior to use 3,000 4,400 1,600

Repairs after production began 5,000 2,900 400



By the end of the first year, each machine had been operating 8,300 hours.



Question1:

Compute the cost of each machine.

(What im confused about is do i need to add the "Repairs after Production began" or no?





Question 2:

Prepare the journal entry to record depreciation expense at the end of year 1, assuming the following (Round depreciation per unit to 2 decimal places and round final answers to the nearest whole dollar amount.



ESTIMATES

Machine Life Residual Value Depreciation Method

A 10 years $2,700 Straight line

B 36,500 hours $3,000 Units of production

C 10 years $2,000 Double-declining balance



I have to make a Journal Entry: the entry consists of one Debit and 3 Credit.



General Journal

Account Name: Debit Credit

_______________ ________

_________________ ________

_________________ ________

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