Q2 Q3 Problem 97A Part Level Submission Yukon Productions Co

Problem 9-7A (Part Level Submission) Yukon Productions Corp. purchased equipment on March 1, 2015, for $69,000. The company estimated the equipment would have a useful life of three years and produce 12,000 units with a residual value of $7,500. During 2015, the equipment produced 4,900 units. On November 30, 2016, the machine was sold for $20,000 and had produced 5,600 units that year. Record all the necessary entries for the years ended December 31, 2015 and 2016, using the following depreciation methods: (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select \"No Entry\" for the account titles and enter 0 for the amounts. Round the depreciation rate in the single diminishing-balance method to 2 decimal places, e.g. 0.33% and Round depreciation per unit in the units-of-production depreciation method to 2 decimal places, e.g. 2.25 and final answers to O decimal places, e.g. 5,275.) (1) Straight-line Date Account Titles and Explanation 2015 Mar. 1 Debit Credit Dec. 31 2016 Nov. 30 To record depreciation expense) Nov. 30 (To record the sale of machine) (2) Single-diminishing-balance

Solution

As per policy, only one question is allowed to answer at a time, so answering Q1 :

Prob 9-7A)
a)
1) Journal entries under Straight Line depreciation method:
Date	Accounts Title	Debit	Credit $
2015
1-Mar	Equipment	69000
	Cash		69000
	(purchase of equipment)
31-Dec	Depreciation	17083		20500*10/12=17083
	Acc Dep - Equip		17083
	(69000-7500 / 3=20500)
2016
30-Nov	Depreciation	15375		20500*9/12=15375
	Acc Dep - Equip		15375
	(depreciation for 9 months)
30-Nov	Acc Dep - Equip	32458
	Cash	20000
	Loss on sale	16542
	Equipment		69000
	(sale of equipment & loss booked)
2) Journal entries under Single diminishing balance depreciation method:
Date	Accounts Title	Debit	Credit $
2015
1-Mar	Equipment	69000
	Cash		69000
	(purchase of equipment)
31-Dec	Depreciation	19165
	Acc Dep - Equip		19165
	(69000*33.33%)*10/12=19165
2016
30-Nov	Depreciation	12458		(69000-19165)*33.33%)*9/12=12458
	Acc Dep - Equip		12458
	(depreciation for 9 months)
30-Nov	Acc Dep - Equip	31623
	Cash	20000
	Loss on sale	17377
	Equipment		69000
	(sale of equipment & loss booked)
3) Journal entries under Units of production depreciation method:
Date	Accounts Title	Debit	Credit $
2015
1-Mar	Equipment	69000
	Cash		69000
	(purchase of equipment)
31-Dec	Depreciation	25113
	Acc Dep - Equip		25113
	(69000-7500)*4900/12000=25113
2016
30-Nov	Depreciation	28700		(69000-7500)*5600/12000=28700
	Acc Dep - Equip		28700
	(depreciation for 9 months)
30-Nov	Acc Dep - Equip	53813
	Cash	20000
	Equipment		69000
	Income on sale		4813
	(sale of equipment & loss booked)