On March 31, 2011, the Herzog Company purchased a factory complete with machinery and equipment.

Question # 00005868 Posted By: spqr Updated on: 12/27/2013 10:25 PM Due on: 01/29/2014
Subject Accounting Topic Accounting Tutorials:
Question
Dot Image

On March 31, 2011, the Herzog Company purchased a factory complete with machinery and equipment. The allocation of the total purchase price of $1,000,000 to the various types of assets along with estimated useful lives and residual values are as follows:

Assets

Cost

Estimated Residual Value

Estimated Useful Life in Years

Land

100,000

N/A

N/A

building

500,000

none

25

Machinery

240,000

10% of cost

8

Equipment

160,000

13,000

6

Total

1,000,000

On June 28,2012, machinery included in the March 31, 2011, purchase that cos $100,000 was sold for $80,000. Herzog uses the straight-line depreciation method for buildings and machinery and the sum-of-the-years’-digits method for equipment. Partial-year depreciation is calculated based on the number of months an asset is in service.

Required:

1. Compare depreciation expense on the building, machinery, and equipment for 2011.

2. Prepare journal entries to record (1) depreciation on the machinery sold on June 29,2012, and (2) the sale of machinery.

3. Compute depreciation expense on the building, remaining machinery, and equipment for 2012.

Dot Image
Tutorials for this Question
  1. Tutorial # 00005658 Posted By: spqr Posted on: 12/27/2013 10:33 PM
    Puchased By: 2
    Tutorial Preview
    The solution of On March 31, 2011, the Herzog Company purchased a factory complete with machinery and equipment....
    Attachments
    Book2.xlsx (10.02 KB)

Great! We have found the solution of this question!

Whatsapp Lisa