Financial Accounting

On January 1, 2014, Thao Company purchased the following two machines for use in its production process.

Machine A:		The cash price of this machine was $43,700. Related expenditures included: sales tax $1,800, shipping costs $160, insurance during shipping $60, installation and testing costs $90, and $180 of oil and lubricants to be used with the machinery during its first year of operations. Thao estimates that the useful life of the machine is 5 years with a $5,400 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used.
Machine B:		The recorded cost of this machine was $240,000. Thao estimates that the useful life of the machine is 4 years with a $15,000 salvage value remaining at the end of that time period.

Prepare the following for Machine A. (Round answers to 0 decimal places, e.g. $2,125. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

1.		The journal entry to record its purchase on January 1, 2014.
2.		The journal entry to record annual depreciation at December 31, 2014.

No.	Account Titles and Explanation	Debit	Credit
1.	[removed]	[removed]	[removed]
	[removed]	[removed]	[removed]
2.	[removed]	[removed]	[removed]
	[removed]	[removed]	[removed]

Calculate the amount of depreciation expense that Thao should record for Machine B each year of its useful life under the following assumptions. (Round answers to 0 decimal places, e.g. $2,125. Round cost per unit to 2 decimal place, e.g. 1.25.)

(1)		Thao uses the straight-line method of depreciation.
(2)		Thao uses the declining-balance method. The rate used is twice the straight-line rate.
(3)		Thao uses the units-of-activity method and estimates that the useful life of the machine is 166,970 units. Actual usage is as follows: 2014, 54,500 units; 2015, 46,670 units; 2016, 36,850 units; 2017, 28,950 units.

		2014		2015		2016		2017
Straight-line method		$[removed]		$[removed]		$[removed]		$[removed]
Declining-balance method		$[removed]		$[removed]		$[removed]		$[removed]
Units-of-activity method		$[removed]		$[removed]		$[removed]		$