Answer:
HERZOG COMPANY
1. Depreciation for the year 2013
Building = $500,000/25 * 9/12= $15,000
Machinery = ($240,000- 24,000)/8*3/12 + ($140,000 - 14,000)/8*6/12 = $14,625
Equipment = 6/21 *(160,000 -13,000)*9/12 = $31,500
2. Journal entries
Date Description DR CR
June 29 Disposal of machinery Account $100,000
Machniery Account $100,000
Being the cost of machinery disposed
June 29 Accumulated depreciation 2,813
Disposal of machinery account 2,813
Being the total depreciation on the machinery sold
June 29 Cash 80,000
Disposal of machniery account 80,000
Being the amount realized on the machinery sold
June 29 Profit and loss account 17,187
Disposal of machinery account 17,187
Being the loss on the machinery sold
3. Depreciation for the year 2014
Building = $500,000/ 25 = $20,000
Machinery = $140,000 - 14,000)/6 = $21,000
Equipment = 5/21 *(160,000 -13,000) = $35,000
Explanation:
