At the beginning of the year . Grillo Industries bought three used machines from

Question

At the beginning of the year . Grillo Industries bought three used machines from Freeman Incorporated .The machines were immediately overhauled, installed and started operating Because the machines were recorded separately in the accounts

Cost of the asset Machine A    Machine B Machine c..

                                    $10, 600

Residual  Cost              1,100.

Total Cost                     9,500

Assuming a 5 yr life what should be the JE at the end of the first Yr .My calculations Cr accumulated dep 1,900 and debit Debep exp 1,900 but my debit was wrong. am i missing something

Explanation / Answer

u need to do in this way

dep --- 10600 miuns 1100 divided by 5years =1900 ,so for a year

1st year:

depreciation a/c 1900

To machinery a/c 1900 so here asset value is geting decreased due to ware n tare

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