PA9-1 (Algo) Computing Acquisition Cost and Recording Depreciation under Three Alternative Methods
[LO 9-2, LO 9-3]
[The following information applies to the questions displayed below.]
At the beginning of the year, Daffodil Company bought three used machines. The machines immediately were overhauled,
were installed, and started operating. Because the machines were different, each was recorded separately in the
accounts. Details for Machine A are provided below.
Cost of the asset
Installation costs
Renovation costs prior to use
Repairs after production began
$9,500
850
750
610
PA9-1 (Algo) Part 5
5. Prepare the journal entry to record year 2 units-of-production depreciation expense for Machine B, assuming a capitalized cost of
$44,100, an estimated life of 30,000 hours, $4,500 residual value, and actual year 2 use of 8,000 hours. (Do not round intermediate
calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)