Problem 9-7A (Part Level Submission) Yukon Productions Corp. purchased equipment

Question

Problem 9-7A (Part Level Submission) Yukon Productions Corp. purchased equipment on March 1, 2015, for $77,000. The company estimated the equipment would have a useful life of three years and produce 12,000 units, with a residual value of $8,300. During 2015, the equipment produced 4,900 units. On November 30, 2016, the machine was sold for $19,000 and had produced 5,600 units that year Record all the necessary entries for the years ended December 31, 2015 and 2016, using the following depreciation methods: (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round the depreciation rate in the single diminishing-balance method to 2 decimal places, e.9-033% and Round depreciation per unit in the units of production depreciation method to 2 decimal places, eg. 2.25 and final answers to 0 decimal places, eg., 5,275

Explanation / Answer

1) Straight line 2015 Debit Credit 1-Mar Equipment $        77,000 Cash $        77,000 31-Dec Depreciation (77000-8300)*1/3*10/12 $        19,083 Accumulated depreciation $        19,083 2016 30-Nov Depreciation (77000-8300)*1/3*11/12 $        20,992 Accumulated depreciation $        20,992 30-Nov Cash $        19,000 Accumulated depreciation (20992+19083) $        40,075 Equipment $        77,000 Loss on sale $        17,925 2) 2015 Debit Credit 1-Mar Equipment $        77,000 Cash $        77,000 31-Dec Depreciation (77000*10/12*33.33%) $        21,387 Accumulated depreciation $        21,387 2016 30-Nov Depreciation (77000-21387)*33.33%*11/12 $        16,991 Accumulated depreciation $        16,991 30-Nov Cash $        19,000 Accumulated depreciation (21387+16991) $        38,378 Equipment $        77,000 Loss on sale $        19,622 3) 2015 Debit Credit 1-Mar Equipment $        77,000 Cash $        77,000 31-Dec Depreciation (77000-8300)/12000*4900 $        28,053 Accumulated depreciation $        28,053 2016 30-Nov Depreciation (77000-8300)/12000*5600 $        32,060 Accumulated depreciation $        32,060 30-Nov Cash $        19,000 Accumulated depreciation (28053+32060) $        60,113 Equipment $        77,000 Profit on sale $          2,113

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