Reference no: EM133145519

Questions -

Q1. Depreciation methods are used to allocate a plant asset's cost over the accounting periods in its useful life. North Co. purchases and installs a machine on January 1, 2017, at a total cost of $105,000. The Company uses straight-line depreciation, 7-year life, and no salvage value. The machine is sold for $45,500 in cash on July 1, 2021.

Requirements - Prepare the entry to record the disposal of the machine.

Q2. Depreciation is used to allocate a plant asset's cost over the accounting period in its useful life.

Textile Co. on January 1, 2017 purchased an asset that cost $264,000 that was expected to be in service for 4 years and had a salvage value of $29,000. On July 1, 2018, the company paid $6,250 in cash for normal repairs.

Requirement -

A. Calculate the annual depreciation for the 2018.

B. Calculate the annual depreciation for the 2019.

Q3. Sales Returns and Allowances require company to prepare journal entries to record the events.

Requirements -

A. For Sales Returns, if the inventory is in a saleable condition, how many entries does the company make? Why?

B. For Sales Returns, if the inventory is damage and not saleable, how may many entries do the company make? Why?

C. For Sales Allowances, how many entries does the company make? Why?