The following data relate to the Machinery account of Metlock, Inc. at December 31, 2025. Machinery A B C D Original cost $50,600 $56,100 $88,000 $88,000 Year purchased 2020 2021 2022 2024 Useful life 10 years 15,000 hours 15 years 10 years Salvage value $3,410 $3,300 $5,500 $5,500 Depreciation method Sum-of-the-years-digits Activity Straight-line Double-declining balance Accum. depr. through 2025* $34,320 $38,720 $16,500 $17,600 "In the year an asset is purchased, Metlock, Inc. does not record any depreciation expense on the asset. In the year an asset is retired or traded in, Metlock, Inc. takes a full year's depreciation on the asset. The following transactions occurred during 2026. a. On May 5, Machine A was sold for $14,300 cash. The company's bookkeeper recorded this retirement in the following manner in the cash receipts journal. Cash Machinery (Machine A) 14,300 14,300 b. On December 31, it was determined that Machine B had been used 2,350 hours during 2026. c. On December 31, before computing depreciation expense on Machine C, the management of Metlock, Inc. decided the useful life remaining from January 1, 2026, was 10 years. d. On December 31, it was discovered that a machine purchased in 2025 had been expensed completely in that year. This machine cost $30,800 and has a useful life of 10 years and no salvage value. Management has decided to use the double-declining- balance method for this machine, which can be referred to as "Machine E." Prepare the necessary correcting entries for the year 2026. Record the appropriate depreciation expense on the above-mentioned machines. No entry is necessary for Machine D. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round intermediate calculations to 3 decimal places, e.g. 4.589 and final answers to O decimal places, e.g. 45,892. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) No. Account Titles and Explanation a. Debit Credit automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) No. Account Titles and Explanation a. (To record current depreciation) b. (To properly record the sale) C. d. (To correct the incorrect expensing of the asset in 2025) (To record depreciation) Debit Credit

The following data relate to the Machinery account of Metlock, Inc. at December 31, 2025. Machinery A B C D Original cost $50,600 $56,100 $88,000 $88,000 Year purchased 2020 2021 2022 2024 Useful life 10 years 15,000 hours 15 years 10 years Salvage value $3,410 $3,300 $5,500 $5,500 Depreciation method Sum-of-the-years-digits Activity Straight-line Double-declining balance Accum. depr. through 2025* $34,320 $38,720 $16,500 $17,600 "In the year an asset is purchased, Metlock, Inc. does not record any depreciation expense on the asset. In the year an asset is retired or traded in, Metlock, Inc. takes a full year's depreciation on the asset. The following transactions occurred during 2026. a. On May 5, Machine A was sold for $14,300 cash. The company's bookkeeper recorded this retirement in the following manner in the cash receipts journal. Cash Machinery (Machine A) 14,300 14,300 b. On December 31, it was determined that Machine B had been used 2,350 hours during 2026. c. On December 31, before computing depreciation expense on Machine C, the management of Metlock, Inc. decided the useful life remaining from January 1, 2026, was 10 years. d. On December 31, it was discovered that a machine purchased in 2025 had been expensed completely in that year. This machine cost $30,800 and has a useful life of 10 years and no salvage value. Management has decided to use the double-declining- balance method for this machine, which can be referred to as "Machine E." Prepare the necessary correcting entries for the year 2026. Record the appropriate depreciation expense on the above-mentioned machines. No entry is necessary for Machine D. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round intermediate calculations to 3 decimal places, e.g. 4.589 and final answers to O decimal places, e.g. 45,892. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) No. Account Titles and Explanation a. Debit Credit automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) No. Account Titles and Explanation a. (To record current depreciation) b. (To properly record the sale) C. d. (To correct the incorrect expensing of the asset in 2025) (To record depreciation) Debit Credit

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 6MCQ: Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense...

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