At the beginning of the year, Grillo Industries bought three used machines from

Question

At the beginning of the year, Grillo Industries bought three used machines from Freeman Incorporated. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts.

Prepare the journal entry to record depreciation expense at the end of year 1, assuming the following: (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)

Estimates

1. Record the depreciation expense for the three used machines at the end of year 1.

At the beginning of the year, Grillo Industries bought three used machines from Freeman Incorporated. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts.

Explanation / Answer

cost of each machine = cost of the asset+Installation costs +Renovation costs                                           prior to use 1) cost of machine A 11900 B 46500 C 29900 2) Depreciation expense Machine A = (11,900-2500)/5= 1880 Machine B = (46500-2100)/20,000 *8000= 17760 Machine C = (29,900*20%)= 5980 General Journal Debit Credit Depreciation expense 37,400 accumulated depreciation-Machine A 1,880 accumulated depreciation-Machine B 17,760 accumulated depreciation-Machine B 5,980

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