On January 1, 2011, Galaxy Sun Industries acquired a new piece of machinery and

Question

On January 1, 2011, Galaxy Sun Industries acquired a new piece of machinery and a used truck from Acme Equipment Company. Galaxy Sun negotiated a price of $108,000 for both items. The fair market value of the equipment was $112,500, and the fair market value of the truck was $37,500. Galaxy Sun Industries signed a note with Acme to make the purchase Prepare the journal entry to record the purchase of the equipment. Use Smart Entry when selection lists are not available to enter the account title in the Description column Not sure about the account title? Click here to view the chart of accounts +Assets Liabilities + Equity + Revenues/Gains + Expenses/Losses GENERAL JOURNAL page DOC. POST NO. REF. DATE ACCOUNT TITLE DEBIT CREDIT an. 1 Machine 40000.00 Truck 37 500 Notes Payable S 108 000

Explanation / Answer

Journal Debit Credit Truck 37500 Machinery 70500 notes payable 108000 useful life 4 years Straight line depreciation in % 25 (100/4) Double the straight line in % 50 (25*2) Depreciation rate = 25*2 = 50% Year opening book value Dep Expense Accumulated Dep Book value 2011 70500 35250 35250 35250 2012 35250 17625 52875 17625 2013 17625 8812.5 61687.5 8812.5 2014 8812.5 4406.25 66093.75 4406.25

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.