Explain accounting rationale for the way of each disposal

Assignment Help Accounting Basics
Reference no: EM131752013

Question: During 2015, the Merkley Company disposed of three different assets. On January 1, 2015, prior to their disposal, the accounts reflected the following:

Asset Original Cost Residual Value Estimated Life

Accum. Depreciation

(Straight line)

Machine A $21,000 $3,000 8 years $15,750 (7 years)
Machine B $50,000 $4,000 10 years $36,800 (8 years)
Machine C $85,000 $5,000 15 years $64,000 (12 years)

The machines were disposed of in the following ways:

a. Machine A: Sold on January 1, 2015, for $5,000 cash.

b. Machine B: Sold on December 31, 2015, for $10,500; received cash, $2,500, and a $8,000 interest-bearing (12 percent) note receivable due at the end of 12 months.

c. Machine C: On January 1, 2015, this machine suffered irreparable damage from an accident. On January 10, 2015, a salvage company removed the machine at no cost.

Required: 1. Give all journal entries related to the disposal of each machine in 2015.

2. Explain the accounting rationale for the way that you recorded each disposal.

Reference no: EM131752013

Questions Cloud

Identify the upstream and downstream costs : During 2014, Welch Manufacturing Company incurred $124,200,000 of research and development (R&D) costs to create a long-life battery to use in computers.
Different roles of mobile devices in crime : 1. What are the different roles of mobile devices in crime?
What is the amount of the march cash collections : What is the amount of the March cash collections, What is the Brazilian Real Chinese Yuancross rate
How vertical and horizontal integration may impact : How vertical and horizontal integration may impact other topics discussed up to this point in the course that were not addressed in the case study provided.
Explain accounting rationale for the way of each disposal : During 2015, the Merkley Company disposed of three different assets. On January 1, 2015, prior to their disposal, the accounts reflected the following.
Regarding the structure of international companies : Regarding the structure of international companies
Multi-state information sharing and analysis center : Along with working with the Multi-State Information Sharing and Analysis Center (MS-ISAC), who else could each city partner with to reduce the risks.
Expected monetary value for alternative buy two machines : A manager must decide how many machines of a certain type to buy. What is the EMV (expected monetary value) for alternative buy two machines?
Write outline for business plan : Write outline for business plan. Executive summary , marketing analysis, and summary of financial needs.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd