Answer:
2017
Machine A (Dr.) $400,000
Machine B (Dr.) $600,000
Cash (Cr.) $1,000,000
2018
Depreciation Expense (Dr.) $93,000
Accumulated Depreciation (Cr.) $93,000
2019
Depreciation Expense (Dr.) $93,000
Accumulated Depreciation (Cr.) $186,000
2020
Depreciation Expense (Dr.) $93,000
Accumulated Depreciation (Cr.) $279,000
2021
Machine C (Dr.) $420,000
Machine A (Cr.) $200,000
Cash (Cr.) $220,000
(To record trade in of machine A)
Repairs expense Machine B (Dr.) $66,000
Cash (Cr.) $66,000
(To record repairs of machine B)
2022
Depreciation Expense (Dr.) $79,450
Accumulated Depreciation (Cr.) $358,450
2023
Cash (Dr.) $300,000
Machine B (Cr.) $284,550
Gain on selling (Cr.) $15,450
Explanation:
Straight line depreciation recognize an assets carrying amount evenly over its useful life.
Straight line Depreciation = (Cost - Estimated Residual Value) / useful life
Depreciation expense for Machine A:
($400,000 - $20,000) / 10 years
= $38,000
Depreciation expense for Machine B:
($600,000 - $50,000) / 10 years
= $55,000
Depreciation expense for Machine C:
($420,000 - $20,000) / 8 years
= $50,000
Revised Depreciation of Machine B:
($314,000 - $19,500) / 10 years
= $29,450
