# Answered Essay: ABC Company purchases a new machine for cash. The machine costs are \$150,000. The 2 company also must pay freig

ABC Company purchases a new machine for cash. The machine costs are \$150,000. The 2 company also must pay freight of S750 to get the machine delivered and \$500 to get the machine installed. The equipment company has agreed to a 10% reduction in price if ABC accepts the machine by the end of June – which ABC has agreed to. ABC has decided to depreciate the machine by the units of output method. It determines there is salvage value of \$2500. The machine will be depreciated over 5 years. The following is the information for 4 units of output. Year 1 Year 2 Year 3 Year 4 1250 hours 1500 hours 2000 hours 2500 hours 1750 hours 10 Year 5 Record the journal entry for the purchase of the equipment for this year, and the journal entry that ABC will record next June for the first year of depreciation on the equipment 15 nits of Output

## Expert Answer

 Journal Entries Sr. No. Date Account Title and explanation Debit Credit 1) 30th of June Machine Account \$1,35,000 To Cash Account \$1,35,000 (Being machine is purchased ) 2 30th of June Freight Account \$750 Installation account \$500 To Cash Account \$1,250 (Being freight and installation is paid for machinary) 3) 30th of June Machine Account \$1,250 To Freight \$750 To Installantion \$500 (Being freight and installation is transfer to machine account) 4) 30 june next year Depreciation account \$18,576 To Machine Account \$18,576 (Being depreciation for the first year is charged) Working Notes CALCULATION OF COST OF MACHINARY PURCHASED Machine Cost \$1,50,000.00 Less : Discount 10% \$15,000.00 Net Cost of machine \$1,35,000.00 Add: Freight \$750.00 Add: Installantion Fees \$500.00 Total Cost of machine \$1,36,250.00 CALCULATION OF DEPRECIATION OF FIRST YEAR OF MACHINE Depreciation = Cost of Machine – Salvage Value / No. of Hours utilized Depreciation = \$136,250 – \$2500 / 9000 Hours Depreciation = \$133,750 / 9000 Hours Depreciation = \$14.86 Per Hours worked No. of hours used = 1250 + 1500 + 2000+ 2500+ 1750 = 9000 Hours Depreciation for First Year = 1250 Hours * \$14.86 = \$ 18,576.39
Calculate your paper price
Pages (550 words)
Approximate price: -

Help Me Write My Essay - Reasons:

Best Online Essay Writing Service

We strive to give our customers the best online essay writing experience. We Make sure essays are submitted on time and all the instructions are followed.

Our Writers are Experienced and Professional

Our essay writing service is founded on professional writers who are on stand by to help you any time.

Free Revision Fo all Essays

Sometimes you may require our writers to add on a point to make your essay as customised as possible, we will give you unlimited times to do this. And we will do it for free.

Timely Essay(s)

We understand the frustrations that comes with late essays and our writers are extra careful to not violate this term. Our support team is always engauging our writers to help you have your essay ahead of time.

Customised Essays &100% Confidential

Our Online writing Service has zero torelance for plagiarised papers. We have plagiarism checking tool that generate plagiarism reports just to make sure you are satisfied.

24/7 Customer Support

Our agents are ready to help you around the clock. Please feel free to reach out and enquire about anything.

Try it now!

## Calculate the price of your order

Total price:
\$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

HOW OUR ONLINE ESSAY WRITING SERVICE WORKS

Let us write that nagging essay.

## Submit Your Essay/Homework Instructions

By clicking on the "PLACE ORDER" button, tell us your requires. Be precise for an accurate customised essay. You may also upload any reading materials where applicable.

Pick A & Writer

Our ordering form will provide you with a list of writers and their feedbacks. At step 2, its time select a writer. Our online agents are on stand by to help you just in case.

Editing (OUR PART)

At this stage, our editor will go through your essay and make sure your writer did meet all the instructions.

Receive your Paper

After Editing, your paper will be sent to you via email.