Machine a the cash price of this machine was 38000 related, Ask an Expert

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Machine A The cash price of this machine was $38,000. Related expenditures included: sales tax $1,700, shipping costs $150, insurance during shipping $80, installation and testing costs $70, and $100 of oil and lubricants to be used with the machinery during its first year of operations. Pele estimates that the useful life of the machine is 5 years with a $5,000 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used.
Machine B The recorded cost of this machine was $160,000. Pele estimates that the useful life of the machine is 4 years with a $10,000 salvage value remaining at the end of that time period.

Prepare the following for Machine A.

The journal entry to record its purchase on January 1, 2012.
The journal entry to record annual depreciation at December 31, 2012.
Date Account/Description Debit Credit

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9975682

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