8-9a. Disposal of asset. Sellem, Inc. is disposing of office furniture it has had for 2...

8-9a. Disposal of asset. Sellem, Inc. is disposing of office furniture it has had for 2 ½ years. The cost of the furniture was $10,000, and Sellem estimated the salvage to be $2,000. A four-year life was expected.

1. Journalize the sale of the machine for $7,500.

2. Journalize the sale of the machine for $2,300.

3. Journalize the disposal if Sellem discarded the furniture.

Expert Solution

Original cost	10000
Less: Estimated salvage	2000
Depreciable cost	8000
Divide: Life	4
Annual depreciation	2000
Multiply: Yrars expired	2.5
Accumulated dep	5000
Book vallue (10000-5000)	5000

Req 1.
Gain on sale = 7500-5000 = 2500

Journal entry:
Accounts title and explanations		Debit $	Credit $
Cash account		7500
Accumulated depreciation-Equipment		5000
Equipment			10000
Gain on sale of Equipment			2500

Req 2.
Loss on sale = 5000-2300 = 2700

Journal entry:
Accounts title and explanations		Debit $	Credit $
Cash account		2300
Accumulated depreciation-Equipment		5000
Loss on sale of Equipment		2700
Equipment			10000

Req 3.
Journal entry:
Accounts title and explanations		Debit $	Credit $
Accumulated depreciation-Equipment		5000
Loss on disposal of assets		5000
Equipment			10000

ekkarill92 answered 2 years ago

Disposal of Fixed Asset Equipment acquired on January 8, 20Y1, at a cost of $517,500, has...

Disposal of Fixed Asset Equipment acquired on January 8, 20Y1, at a cost of $517,500, has an estimated useful life of 16 years and an estimated residual value of $103,500. a. What was the annual amount of depreciation for the years 20Y1, 20Y2, and 20Y3, using the straight-line method of depreciation? Round annual depreciation to the nearest dollar and use this amount in your follow-on calculations. Depreciation expense 20Y1 $ 20Y2 $ 20Y3 $ b. What was the book value...

Disposal of Fixed Asset Equipment acquired on January 8, 20Y1, at a cost of $730,000, has...

Disposal of Fixed Asset Equipment acquired on January 8, 20Y1, at a cost of $730,000, has an estimated useful life of 18 years and an estimated residual value of $146,000. a. What was the annual amount of depreciation for the years 20Y1, 20Y2, and 20Y3, using the straight-line method of depreciation? Round annual depreciation to the nearest dollar and use this amount in your follow-on calculations. Depreciation expense 20Y1 $ 20Y2 $ 20Y3 $ b. What was the book value...

Office Furniture Inc. sells modular desk units and office chairs in the ratio of 3:2. That...

Office Furniture Inc. sells modular desk units and office chairs in the ratio of 3:2. That is 3 desk units for every 2 chairs sold. The selling prices are $1,280 per desk unit and $540 per chair. The variable costs are $760 per desk unit and $270 per chair. Shared fixed costs total $160,000. a) Prepare a schedule to compute the selling price and variable cost per composite unit. b) Compute the break-even point in composite units. c) Compute the...

Mayfair Office Chairs, Inc. is a small firm in the office furniture industry. They have asked...

Mayfair Office Chairs, Inc. is a small firm in the office furniture industry. They have asked you to help them complete the limited data they have gathered in an effort to enable effective decision-making. Some work can be done using MS Excel but it must be copied to an MS Word file for the final submission of this assignment. To assist Mayfair Office Chairs, Inc., respond to the following: Using MS Excel or a table in MS Word, complete Table-1...

A furniture supplier, Acme Chairs, Inc., manufactures a Basic office chair and a Deluxe office chair....

A furniture supplier, Acme Chairs, Inc., manufactures a Basic office chair and a Deluxe office chair. Each Basic chair costs $25.00 to manufacture, and each Deluxe office chair costs $40.00 to manufacture. Acme Chairs wishes to determine the optimal production quantities per day for each chair model in order to minimize overall total cost. The production of each chair requires three types of materials: Wood, Primer, and Paint. The amount of material available per day to manufacture the chairs is...

Please show all steps: A company has purchased some office furniture for $100,000. The furniture has...

Please show all steps: A company has purchased some office furniture for $100,000. The furniture has a 6 year life and salvage value of $10,000. Compute the depreciation schedule using: (Chapter 11) -straight line depreciation -sum of years digits

Disposal of Fixed Asset Equipment acquired on January 6 at a cost of $422,300, has an...

Disposal of Fixed Asset Equipment acquired on January 6 at a cost of $422,300, has an estimated useful life of 9 years and an estimated residual value of $55,100. a. What was the annual amount of depreciation for the Years 1-3 using the straight-line method of depreciation? Year Depreciation Expense Year 1 $ Year 2 $ Year 3 $ b. What was the book value of the equipment on January 1 of Year 4? $ c. Assuming that the equipment...

Disposal of Fixed Asset Equipment acquired on January 6 at a cost of $353,300 has an...

Disposal of Fixed Asset Equipment acquired on January 6 at a cost of $353,300 has an estimated useful life of 8 years and an estimated residual value of $46,100. a. What was the annual amount of depreciation for the Years 1-3 using the straight-line method of depreciation? Year Depreciation Expense Year 1 $ Year 2 $ Year 3 $ b. What was the book value of the equipment on January 1 of Year 4? $ c. Assuming that the equipment...

Disposal of Fixed Asset Equipment acquired on January 6 at a cost of $234,600, has an...

Disposal of Fixed Asset Equipment acquired on January 6 at a cost of $234,600, has an estimated useful life of 10 years and an estimated residual value of $30,600. a. What was the annual amount of depreciation for the Years 1-3 using the straight-line method of depreciation? Year Depreciation Expense Year 1 $ Year 2 $ Year 3 $ b. What was the book value of the equipment on January 1 of Year 4? $ c. Assuming that the equipment...

Disposal of Fixed Asset Equipment acquired on January 6 at a cost of $236,000 has an...

Disposal of Fixed Asset Equipment acquired on January 6 at a cost of $236,000 has an estimated useful life of 9 years and an estimated residual value of $30,800. a. What was the annual amount of depreciation for the Years 1-3 using the straight-line method of depreciation? YearDepreciation Expense Year 1$ Year 2$ Year 3$ b. What was the book value of the equipment on January 1 of Year 4? $ c. Assuming that the equipment was sold on January...

Question