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Prepare journal entries

(2)The next activity occurred on February1, 20x7. A molding machine was purchased for $247,000. The machinecost an additional $10,000 to have it shipped to the plant. Once onlocation, the company had $5,000 in installation and operatingcosts before the machine was ready to begin full operation. Twoemployees went to a one-day training school to learn how to operatethe new machine at a cost of $1,400. The molding machine has an8-year useful life and a salvage value of$22,000. The company paid cash for theshipping, installation, and training charges plus $25,000 for themachine. The balance due on the machine was set up with a notepayable.

(3)On March 1, 20x7, a cutting machine wastraded in for a similar new computerized cutting machine. The oldmachine, which originally cost $130,000, had been at the companysince January 1, 20x1 and had 1 year and 10 months of useful liferemaining. The salvage value of the old machine was estimated at$10,000, but the company received $36,000 as a trade in value. Thenew machine cost $280,000, which included delivery andinstallation. The new machine has an expected life of 10 years atwhich time it could probably be sold for $40,000. The company madea down payment of $20,000 and signed a five year note payable forthe balance due.

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Reid Wolff
Reid WolffLv2
28 Sep 2019

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I need the following events entered into a general journal.

Thank you.

(1) Kevin and Gloria got together with thedocumentation and began to review the long-term asset activities.On January 15, 20x7, the company disposed of a stamping machine.The machine was originally purchased on January 15, 20x0 for$84,000. The machine was estimated to have a useful life of 10years with a zero salvage value. (Note: Gray & Greene use astraight-line method of depreciation for all long-term assetsunless otherwise noted.) No effort was made to sell or trade themachine because the machine was broken beyond repair. $100 was alsopaid to a salvage company to disassemble and remove the machinefrom the plant.

(2) The next activity occurred on February 1,20x7. A molding machine was purchased for $247,000. The machinecost an additional $10,000 to have it shipped to the plant. Once onlocation, the company had $5,000 in installation and operatingcosts before the machine was ready to begin full operation. Twoemployees went to a one-day training school to learn how to operatethe new machine at a cost of $1,400. The molding machine has an8-year useful life and a salvage value of $22,000. Thecompany paid cash for the shipping, installation, and trainingcharges plus $25,000 for the machine. The balance due on themachine was set up with a note payable.

(3) On March 1, 20x7, a cutting machine wastraded in for a similar new computerized cutting machine. The oldmachine, which originally cost $130,000, had been at the companysince January 1, 20x1 and had 1 year and 10 months of useful liferemaining. The salvage value of the old machine was estimated at$10,000, but the company received $36,000 as a trade in value. Thenew machine cost $280,000, which included delivery andinstallation. The new machine has an expected life of 10 years atwhich time it could probably be sold for $40,000. The company madea down payment of $20,000 and signed a five year note payable forthe balance due.

(4) April 1, 20x7 a pressing machine was soldfor $71,000. It originally cost $185,000 and had a book value onDecember 31, 20x6 of $72,500. The annual depreciation for thismachine was $18,000. The machine was expected to have a $5,000salvage value in about four years.

(5) To celebrate April 15, 20x7, the companyacquired a new utility van, which would be used to pick up anddeliver parts to customers and suppliers in the immediate vicinity.The van has a sticker price of $37,595, but the company was able tosecure the vehicle for $35,000. The van will probably have a usefullife of 5 years with a book value of $5,000 at the end of thattime. The company paid $7,000 and signed a 3 year note for thebalance due.

(6) On May 1, 20x7 an old pressing machine wastraded in for a new computerized processing machine. These machineswere used on different production lines and considered asdissimilar equipment. The old pressing machine cost $157,000 whenit was purchased on May 1, 20x3 and had a useful life of 8 yearswith a salvage value of $13,000. A $90,000 trade-in allowance wasgiven for the pressing machine. The new processing machine had alist price of $350,000, but only cost the company $260,000 afterthe trade-in. The new machine had a nine-year useful life with a$26,000 salvage value. The company paid $52,000 down and signed anote payable for the balance due.

(7) August 1, 20x7 the company had to completea major overhaul on an assembly machine. The machine had beenpurchased for $430,000 on August 1, 20x2. The machine was expectedto last for 12 years with a $70,000 salvage value. If the repairshad not been completed, the machine would not function efficientlyin the company and would have to be disposed for its parts, whichwould have brought the company about $30,000. The cost of therepairs was $33,000, but the overhaul was expected to add 2 yearsonto the remaining life of the machine. The repairs were paid forin cash.

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