Required information t 2 of 3 Problem 8-6A Disposal of plant assets LO C1, P1, P

Question

Required information t 2 of 3 Problem 8-6A Disposal of plant assets LO C1, P1, P2 The following information applies to the questions displayed below) Onslow Co. purchases a used machine for $192,000 cash on January 2 and readies it for use the cost. On January 3, it is installed on a required The company predicts the machine will be used for six years and have a $23,040 saivage value. Depreciation is to be charged on a straight line basis. On December 31, at the end of its fith year in operations t is disposed of costing $1,600 , and it is further readied for operations Problem 8-6A Part 2 2. Prepare journal entries to record Print Journal entry worksheet the used machine. Dec 31

Explanation / Answer

Particulars Amont ($) Purchase of machine 192000 Add: Additional cost of setup 8000 Add: Operating platform cost 1600 Cost of machine 201600 Less: Salvage value 23040 Depreciable value of machine 178560 Useful life 6 years Depreciation per year = 178560/6 29760 Journal Entry: Dec-31 Depreciation A/c Dr……………$29760                                  To Machine (Fixed Asset) A/c $29760 Dec-31 Profit and loss A/c Dr………….$29760                                  To Depreciation A/c $29760 Please hit the like button if the answer helped you else leave a comment for further clarification. Thank you! All the best!

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