(24 pts) Help Save&Exit; Submit O You received partial credit in the previous at
ID: 2563211 • Letter: #
Question
(24 pts) Help Save&Exit; Submit O You received partial credit in the previous attempt. Check my work Exercise 8-17 Partial-year depreciation; disposal of plant asset LO P2 ases and installs a machine on January 1, 2017, at a total cost of $105.000. Straight-line depreciation is taken each year for four years assuming a seven-year life and no salvage value. The service. machine is disposed of on y assumptions: () The machine is sold for $45,500 cash. (2) An insurance settlement of $25,000 is received due to the machine's total destruction in a fire Journal entry worksheet Record the insurance settlement received of s25,000 due to the machine's total destruction in a fire. e to searchExplanation / Answer
JOURNAL ENTRIES:
1) Record the depreciation expense as of July 1,2021
July 1 Dr. Depreciation Expense $7,500
Cr. Accumulated Depreciation-Machinery $7,500
(Record half year depreciation)
Working:
Depreciation per year: Cost-Salvage vale/Useful life in periods = $105,000/7 years = $15,000
2) The machine is sold for $45,500 cash.
July 31 Dr. Cash 45,500
Dr. Accumulated Depreciation-Equipment $67,500
Cr. Gain on Disposal of Equipment $8,000
Cr. Equipment $105,000
(Record for the sale of equipment for a $8,000 gain)
3) An insurance settlement of $25,000 is received due to the machine's total destruction in a fire
July 31 Dr. Cash $25,000
Dr. Loss on Disposal of Equipment $12,500
Dr. Accumulated Depreciation-Equipment $67,500
Cr. Equipment $105,000
(Record for disposal of equipment due to fire)
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