College Accounting: Chapter 18 Mastery Problem - On April 1, 20-3, Kwik Kopy Printing purchased

College Accounting Chapter 18 Mastery Problem On April 1, 20-3, Kwik Kopy Printing purchased a copy machine for $50,000. The estimated life of the machine is five years, and it has an estimated salvage value of $5,000. The machine was used until July 1, 20-6. Required: 1. Assume that Kwik Kopy uses straight-line depreciation and prepare the following entries: a. Adjusting entries for depreciation on December 31 of 20-3 through 20-5. b. Adjusting entry for depreciation on June 30, 20-6, just prior to trading in the asset. c. On July 1, 20-6, the copy machine was traded in for a new copy machine. The market value of the new machine is $38,000. Kwik Kopy must trade in the old copy machine and pay $22,000 for the new machine. 2. Assume that Kwik Kopy uses sum-of-the-years’ digits depreciation and prepare the following entries. a. Adjusting entries for depreciation on December 31, 20-3 through 20-5. b. Adjusting entry for depreciation on June 30, 20-6, just prior to trading in the asset. c. On July 1, 20-6, the copy machine was traded in for a new copy machine. The market value of the new machine is $38,000. Kwik Kopy must trade in the old copy machine and pay $22,000 for the new machine.
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