Required information [The following information applies to the questions display

Question

Required information [The following information applies to the questions displayed below.] Onslow Co. purchases a used machine for $288,000 cash on January 2 and readies it for use the next day at a $10,000 cost. On January 3, it is installed on a required operating platform costing $2,000, and it is further readied for operations The company predicts the machine will be used for six years and have a $34,560 salvage value. Depreciation is to be charged on a straight-line basis. On December 31, at the end of its fifth year in operations, it is disposed of 2. Prepare journal entries to record depreciation of the machine at December 31 View transaction list Journal entry worksheet Record the first year year-end adjusting entry for the depreciation expense of the used machine. Note: Enter debits before credits. Date General Journal Debit Credit Dec 31 Record entry Clear entry View general journal

Explanation / Answer

working note:

calculation of annual depreciation:

(total cost - salvage value) / expected life

=> (288,000+ 10,000 +2,000 - 34,560) / 6 years.

=> (265,440) / 6 years

=>$44,240.

now, the following are the journal entries:

2.year of disposal depreciation entry:

date general journal debit credit dec 31 Depreciation expenses - machinery 44,240 ............To Accumulated depreciation - machinery 44,240

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