The following information applies to the questions displayed below During the cu

Question

The following information applies to the questions displayed below During the current year, Merkley Company disposed of three different assets. On January 1 of the current year, prior to their disposal, the accounts reflected the following straight line) S 21,0003,000 10 years$ 14,400 (8 years) 4,000 10 years 5,400 39,200 (8 years) 53,000 76,400 years a. Machine A: Sold on January 1 for $6,300 cash. o. Machine BSold on December 31 tor Sasoos received cash, S2.30O and a S7,200 nterest-bearing 02 percennote receivable due at the end of t2 months. c. Machvine C: On January 1: this machine suffered irreparable damage from an accident On January 10, a salvage company removed the machine at no cost

Explanation / Answer

Journal Entries: Machines Particulars         Debit Credit Machine A Cash 6300 Accumulated Depreciation 14400 Loss on disposal of Machine 300 Machine A 21000 Machine B Depreciation expense 4900 Accumulated Depreciation on machine B 4900 Machine C Accumulated Depreciation 47333 Loss on disposal of Machine 29067 Machine C 76400 *Calculation of depreciation of Machine B : (Cost - residule value) / estimated life (53000 - 4000) / 10years 49000 / 10 4900

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