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Prepare the journal entry for the purchase of the machine

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Reference no: EM132619531

Question - The company purchased a machine on 1 January 2018. The information of the machine is as follows:

Costs on Acquisition on 1 January 2018:

Machine Cost (paid in cash by purchaser) $25,000

Import Tax (paid in cash by purchaser) $2,000

Delivery Fees (paid in cash by purchaser) $3,000

Depreciation Method:

Reducing balance method at the rate of 40%

Residual value: $4,000

Useful Life: 5 Years

Required -

1. Prepare the journal entry for the purchase of the machine.

2. Calculate the depreciation expense for the year 2019.

3. On 1 January 2020, the machine was sold for $12,000. Prepare the journal entry for this sale.

Reference no: EM132619531

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