Reference no: EM131770772

64.Duncan Company purchased a machine at a cost of $60,000. The machine is expected to have a $5,000 salvage value at the end of its 5-year useful life.

Instructions

Compute annual depreciation for the first and second years using the

(a) Straight-line method.

(b) Double-declining-balance method.

65. Presented below are two independent situations:

(a) Riley Company exchanged an old machine (cost $75,000 less $45,000 accumulated depreciation) plus $5,000 cash for a new similar type machine. The old machine had a fair market value of $27,000. Prepare the entry to record the exchange of similar assets by Riley Company.

(b) Denton Company trades old equipment (cost $60,000 less $36,000 accumulated depreciation) for new equipment. Denton paid $24,000 cash in the trade. The old equipment that was traded had a fair market value of $36,000. Prepare the entry to record the exchange of assets by Denton Company.