Natural Company purchased a new machine for production on January 1, 2014. The company intends...
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Accounting
Natural Company purchased a new machine for production on January 1, 2014. The company intends to depreciate it over 5 years using double-declining balance method. The salvage value is $6,000. Purchase price $60,000 Sales tax $5,175 Insurance during shipping $2,600 Installation and testing $2,225 Extended service warranty $1,200
a) Calculate the cost of the new machine.
b) Prepare the journal entry to record the machine purchase.
c) Prepare the depreciation schedule for the five year period.
d) Prepare the journal entry to record depreciation expense in year 2018.
Using the information from above, assume the machine was sold at the end of 2016 for $20,000.
a) Calculate the gain or loss on the sale
b) Make the journal entry to record the sale
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