Required Information P8-3 (Algo) Computing the Acquisition Cost and Recording Depreciation under Three Alternative Methods LO8-2, 8-3 [The following information applies to the questions displayed below.] At the beginning of the year, Plummer's Sports Center bought three used fitness machines from Primo Fitness, an established supplier of used, new and refurbished gym equipment in Southern California. The machines immediately were overhauled and started operating. The machines were different; therefore, each had to be recorded separately in the accounts. Invoice price paid for asset Shipping costs (paid by Plummer) Renovation costs prior to use Machine A Machine B Machine C $12,600 2,000 $34,000 2,200 $9,350 908 4,300 1,000 3,000 By the end of the first year, each machine had been operating 4,900 hours. P8-3 Part 2 2. Prepare the entry to record depreciation expense at the end of Year 1, assuming the following. Note: Do not round Intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" In the first account field. ESTIMATES Machine Life Residual Value Depreciation Method ABU B 6 years 67,000 hours $2,700 Straight-line 3,700 Units-of-production 5 years 2,400 Double-declining- balance 1 No Transaction Answer is complete but not entirely correct. Depreciation expense General Journal Accumulated depreciation, Machine A Accumulated depreciation, Machine B Accumulated depreciation, Machine C Debit Credit 10,450 10,450x 42.385 X 3,743
Required Information P8-3 (Algo) Computing the Acquisition Cost and Recording Depreciation under Three Alternative Methods LO8-2, 8-3 [The following information applies to the questions displayed below.] At the beginning of the year, Plummer's Sports Center bought three used fitness machines from Primo Fitness, an established supplier of used, new and refurbished gym equipment in Southern California. The machines immediately were overhauled and started operating. The machines were different; therefore, each had to be recorded separately in the accounts. Invoice price paid for asset Shipping costs (paid by Plummer) Renovation costs prior to use Machine A Machine B Machine C $12,600 2,000 $34,000 2,200 $9,350 908 4,300 1,000 3,000 By the end of the first year, each machine had been operating 4,900 hours. P8-3 Part 2 2. Prepare the entry to record depreciation expense at the end of Year 1, assuming the following. Note: Do not round Intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" In the first account field. ESTIMATES Machine Life Residual Value Depreciation Method ABU B 6 years 67,000 hours $2,700 Straight-line 3,700 Units-of-production 5 years 2,400 Double-declining- balance 1 No Transaction Answer is complete but not entirely correct. Depreciation expense General Journal Accumulated depreciation, Machine A Accumulated depreciation, Machine B Accumulated depreciation, Machine C Debit Credit 10,450 10,450x 42.385 X 3,743
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter10: Long-lived Tangible And Intangible Assets
Section: Chapter Questions
Problem 29P
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Question
![Required Information
P8-3 (Algo) Computing the Acquisition Cost and Recording Depreciation under Three Alternative
Methods LO8-2, 8-3
[The following information applies to the questions displayed below.]
At the beginning of the year, Plummer's Sports Center bought three used fitness machines from Primo Fitness, an
established supplier of used, new and refurbished gym equipment in Southern California. The machines immediately were
overhauled and started operating. The machines were different; therefore, each had to be recorded separately in the
accounts.
Invoice price paid for asset
Shipping costs (paid by Plummer)
Renovation costs prior to use
Machine A Machine B Machine C
$12,600
2,000
$34,000
2,200
$9,350
908
4,300
1,000
3,000
By the end of the first year, each machine had been operating 4,900 hours.
P8-3 Part 2
2. Prepare the entry to record depreciation expense at the end of Year 1, assuming the following.
Note: Do not round Intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" In
the first account field.
ESTIMATES
Machine
Life
Residual Value
Depreciation Method
ABU
B
6 years
67,000 hours
$2,700
Straight-line
3,700
Units-of-production
5 years
2,400
Double-declining-
balance
1
No
Transaction
Answer is complete but not entirely correct.
Depreciation expense
General Journal
Accumulated depreciation, Machine A
Accumulated depreciation, Machine B
Accumulated depreciation, Machine C
Debit
Credit
10,450
10,450x
42.385 X
3,743](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F077d20a8-e337-490f-9d60-ba190e21286b%2Fac5b603a-83c4-49f9-aaf9-705776babaa3%2Fepytsc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required Information
P8-3 (Algo) Computing the Acquisition Cost and Recording Depreciation under Three Alternative
Methods LO8-2, 8-3
[The following information applies to the questions displayed below.]
At the beginning of the year, Plummer's Sports Center bought three used fitness machines from Primo Fitness, an
established supplier of used, new and refurbished gym equipment in Southern California. The machines immediately were
overhauled and started operating. The machines were different; therefore, each had to be recorded separately in the
accounts.
Invoice price paid for asset
Shipping costs (paid by Plummer)
Renovation costs prior to use
Machine A Machine B Machine C
$12,600
2,000
$34,000
2,200
$9,350
908
4,300
1,000
3,000
By the end of the first year, each machine had been operating 4,900 hours.
P8-3 Part 2
2. Prepare the entry to record depreciation expense at the end of Year 1, assuming the following.
Note: Do not round Intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" In
the first account field.
ESTIMATES
Machine
Life
Residual Value
Depreciation Method
ABU
B
6 years
67,000 hours
$2,700
Straight-line
3,700
Units-of-production
5 years
2,400
Double-declining-
balance
1
No
Transaction
Answer is complete but not entirely correct.
Depreciation expense
General Journal
Accumulated depreciation, Machine A
Accumulated depreciation, Machine B
Accumulated depreciation, Machine C
Debit
Credit
10,450
10,450x
42.385 X
3,743
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