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Financial Accounting, IFRS International Financial Reporting Standards On May 19, 2020, Sinnott Corporation purchased two pieces of used equipment for $600,000 as a package deal
Financial Accounting, IFRS International Financial Reporting Standards
On May 19, 2020, Sinnott Corporation purchased two pieces of used equipment for $600,000 as a package deal. Immediately after the purchase, Sinnott had the two pieces of equipment appraised and the processing equipment had a fair value of $372,000 and the packaging equipment had a fair value of $248,000
Sinnott paid $10, 000 in transportation costs to get both pieces of equipment to the company's manufacturing facility.
Sinnott also paid $4000 for installation for the processing equipment and $12,000 in installation for the packaging equipment. All of the installation work was completed on July 1, 2020 and Sinnott began to use the equipment.
Sinnott expects the processing equipment to have a useful life of 5 years and a residual value of $70,000.
The packaging equipment is expected to have a useful life of 7 years and a residual value of $46, 000. Sinnott used straight line method for both pieces of equipment.
Record the purchase using two asset accounts: Processing Equipment and "Packaging Equipment" with "Processing Equipment" First
Record the purchase using two asset accounts: Processing Equipment and "Packaging Equipment" with "Processing Equipment" First
Provide Journal Entry
Debit Amount $
Debit Amount
Credit . Amount
Record the transportation costs for each machine - using the same order
Provide Journal Entry
Dr Amount
Dr Amount
Cr. Amount
Record the installation costs for each machine - using the same order
Provide Journal Entry
Debit account Amount
Debit account Amount
Credit account Amount
The depreciation expense for the year end December 31, 2020 for each machine. Do each journal entry separately. For simplicity use the general account titles of Depreciation Expense and Accumulated Depreciation
Provide Journal Entry
Processing Equipment:
Dr Amount
Cr. Amount
Provide Journal Entry
Packaging Equipment:
Dr Amount
Cr. Amount
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