Finesse Co. purchases and installs a machine on January 1, 2011, at a total cost of $92,200. Straight-line depreciation is taken each year for four years assuming a 8-year life and no salvage value. The machine is disposed of on July 1, 2015, during its fifth year of service. Prepare entries to record the partial year’s depreciation on July 1, 2015. (Round intermediate calculations to the nearest whole dollar.)

Finesse Co. purchases and installs a machine on January 1, 2011, at a total cost of $92,200. Straight-line depreciation is taken each year for four years assuming a 8-year life and no salvage value. The machine is disposed of on July 1, 2015, during its fifth year of service.

 

Prepare entries to record the partial year’s depreciation on July 1, 2015. (Round intermediate calculations to the nearest whole dollar.)

 

Prepare entries to record the disposal under the following separate assumptions:

  

(1)	The machine is sold for $42,758 cash. (Round intermediate calculations to the nearest whole dollar.)

 

(2)

Finesse receives an insurance settlement of $38,724 resulting from the total destruction of the machine in a fire. (Round intermediate calculations to the nearest whole dollar.)

 

Explanation:

Annual depreciation = $92,200 / 8 years = $11,525

Depreciation for 6 months in 2015 = $11,525 × 6/12 = $5,763

(1) & (2)

Total accumulated depreciation at date of disposal:
Four years 2011-2014 (4 × $11,525)	$	46,100
Partial year 2015 (6/12 × $11,525)		5,763
Total accumulated depreciation	$	51,863