Prepare the journal entry at the year end of December

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Question -

1) Prepare the journal entries to record the following costs which were all incurred on October 1, 2021:

1. ART Inc. purchased a trade name, customer list, and manufacturing equipment for a lump sum of $700 cash. The fair market value of each asset was determined to be $150, $350, and $500 respectively.

2. ART also spent $50 cash to install the new equipment and $15 cash to promote the new product the manufacturing equipment is being used for.

2) Prepare the journal entry at the year end of December 31, 2021 for ART to record the equipment depreciation. The equipment is depreciated based on a useful life of 4 years, residual value of $40, using the double-declining balance method.

Reference no: EM132931370

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