Exercise 10-24 On December 31, 2014, Travis Tritt Inc. has a machine with a book

Question

Exercise 10-24 On December 31, 2014, Travis Tritt Inc. has a machine with a book value of $1,476,740. The original cost and related accumulated depreciation at this date are as follows. Machine Less: Accumulated depreciation Book value $2,042,300 565,560 1,A76,/40 Depreciation is computed at $94,260 per year on a straight-line basis Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record the transaction. Make sure that depreciation entries are made to update the book value of the machine prior to its disposal.

Explanation / Answer

Part A)

The journal entries are as follows:

________

Part B)

________

Part C)

Date Account Titles and Explanation Debit Credit 31st August 2015 Depreciation Expense (94,260*8/12) $62,840 Accumulated Depreciation - Machine $62,840 (To record current depreciation) 31st August 2015 Cash $675,530 Accumulated Depreciation - Machine (565,560 + 62,840) $628,400 Loss on Disposal of Machinery (2,042,300 – 628,400 – 675,530) $738,370 Machinery $2,042,300 (To record loss of machine)

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