At the beginning of the year, Plummer's Sports Center bought three used fitness machines from...
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Accounting
At the beginning of the year, Plummer's Sports Center bought three used fitness machines from Brunswick Corporation. The machines immediately were overhauled, installed, and started operating. The machines were different; therefore, each had to be recorded separately in the accounts.
Machine A
Machine B
Machine C
Invoice price paid for asset
$
20,400
$
37,300
$
22,100
Installation costs
2,300
2,000
600
Renovation costs prior to use
2,900
2,500
1,700
By the end of the first year, each machine had been operating 5,400 hours.
Required:
1. Compute the cost of each machine.
Machine A $25,600
Machine B $41,800
Machine C $24,400
2. Prepare the 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.)
ESTIMATES
Machine
Life
Residual Value
Depreciation Method
A
9 years
$1,300
Straight-line
B
77,000 hours
3,300
Units-of-production
C
8 years
3,100
Double-declining-balance
FILL IN THE JOURNAL ENTRY
No
Transaction
General Journal
Debit
Credit
1
1
Answer & Explanation
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