Answer:
Please see the solution below:
Explanation:
Machine A:
<em>(i) Total </em>Machine A<em> Cost
</em>
Purchase Price = $37,500
Sales Tax = $3,600
Shipping Cost = $100
Insurance during shipping = $50
Installation and Testing Cost = $120
Total Machine A cost = $41,370
<em>(ii) Depreciation
</em>
Recorded Cost = $41,370
Less: Salvage Value = $5,950
Useful Life = 5 years
Straight Line Method is used to find depreciation per yer will be:
Depreciation = $7,084
(1) The Journal Entry to record purchase of equipment (Machine A)
<em>January 1, 2017
</em>
Dr. Equipment $41,370
Cr. Cash $41,370
(2) The Journal Entry to record annual depreciation (Machine A)
<em>December 3, 2017
</em>
Dr. Depreciation $7,084
Cr. Accumulated Depreciation - Equipment $7,084
