Question -
1) A machine that cost $540,000 has an estimated residual value of $60,000 and an estimated useful life of six years. The company uses straight-line depreciation. Calculate its book value at the end of year 5. (Do not round intermediate calculations.)
2) The following are the transactions of Morrell Corporation:a. Morrell Corporation disposed of two computers at the end of their useful lives. The computers had cost $4,660 and their Accumulated Depreciation was $4,660. No residual value was received. Assume the same information as (a), except that Accumulated Depreciation, updated to the date of disposal, was $3,320.
Prepare journal entries to record above transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
a) Record the disposal of computers that had cost $4,660 and their accumulated depreciation to the date of disposal was $4,660.
b) Record the disposal of computers that had cost $4,660 and their accumulated depreciation to the date of disposal was $3,320.