On march 31 2012 the herzog company purchased a factory

Reference no: EM13573834

On March 31, 2012, 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 Costs Estimated Residual Value Estimated Useful Life in Years

land 100000 n/a n/a
building 500000 none 25
machinery 240000 10% of cost 8
equiptment 160000 13000 6
Total 1,000,000

On June 29, 2014, machinery included in the March 31, 2011, purchase that cost $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.Prepare the journal entries to record (1)depreciation on the machinery sold on June 29,2014 and (2)the sale of machinery.

2.Compute depreciation expense on the building, remaining machinery, and equipment for 2014

Reference no: EM13573834

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