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Get-It Jeeps Incorporated is in the business of producing fuel efficient all terrain Jeeps. Get-It Jeeps purchases a new robotic assembly machine on March 31, 2012 for $5,550,000; that has an estimated life of 15 years; and a Jeep production capacity of 5,000,000. In the engine of the robotic assembly machine is a solid gold covering that surrounds the outer mantel of the gear box; this 24 karat gold covering is used because it is soft and has more give than steel. The covering is worth $750,000 and can be resold on the open market.
Problem 1: Prepare the appropriate journal entries using the double-Declining Balance-Method to account for the first year of deprecation incurred on Get-It Jeeps assembly machine at December 31, 2012.
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