Question
In: Accounting
Mercury Inc. purchased equipment in 2019 at a cost of $138,000. The equipment was expected to...
Mercury Inc. purchased equipment in 2019 at a cost of $138,000.
The equipment was expected to produce 500,000 units over the next
five years and have a residual value of $38,000. The equipment was
sold for $78,200 part way through 2021. Actual production in each
year was: 2019 = 70,000 units; 2020 = 112,000 units; 2021 = 57,000
units. Mercury uses units-of-production depreciation, and all
depreciation has been recorded through the disposal date.
Required:
1. Calculate the gain or loss on the sale.
2. Prepare the journal entry to record the
sale.
3. Assuming that the equipment was instead sold
for $105,200, calculate the gain or loss on the sale.
4. Prepare the journal entry to record the sale in
requirement 3.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Mercury Inc. purchased equipment in 2019 at a cost of $138,000. The equipment was expected to...
Mercury Inc. purchased equipment in 2019 at a cost of $138,000.
The equipment was expected to produce 500,000 units over the next
five years and have a residual value of $38,000. The equipment was
sold for $78,200 part way through 2021. Actual production in each
year was: 2019 = 70,000 units; 2020 = 112,000 units; 2021 = 57,000
units. Mercury uses units-of-production depreciation, and all
depreciation has been recorded through the disposal date.
Required:
1. Calculate the gain or loss...
Mercury Inc. purchased equipment in 2019 at a cost of $212,000. The equipment was expected to...
Mercury Inc. purchased equipment in 2019 at a cost of $212,000.
The equipment was expected to produce 460,000 units over the next
five years and have a residual value of $28,000. The equipment was
sold for $115,600 part way through 2021. Actual production in each
year was: 2019 = 65,000 units; 2020 = 104,000 units; 2021 = 52,000
units. Mercury uses units-of-production depreciation, and all
depreciation has been recorded through the disposal date.
Required:
1. Calculate the gain or loss...
Mercury Inc. purchased equipment in 2019 at a cost of $110,000. The equipment was expected to...
Mercury Inc. purchased equipment in 2019 at a cost of $110,000.
The equipment was expected to produce 380,000 units over the next
five years and have a residual value of $34,000. The equipment was
sold for $63,400 part way through 2021. Actual production in each
year was: 2019 = 54,000 units; 2020 = 86,000 units; 2021 = 43,000
units. Mercury uses units-of-production depreciation, and all
depreciation has been recorded through the disposal date.
Required:
1. Calculate the gain or loss...
Mercury Inc. purchased equipment in 2016 at a cost of $249,000. The equipment was expected to...
Mercury Inc. purchased equipment in 2016 at a cost of $249,000.
The equipment was expected to produce 510,000 units over the next
five years and have a residual value of $45,000. The equipment was
sold for $134,800 part way through 2018. Actual production in each
year was: 2016 = 71,000 units; 2017 = 114,000 units; 2018 = 58,000
units. Mercury uses units-of-production depreciation, and all
depreciation has been recorded through the disposal date.
Required:
1. Prepare the journal entry to...
In 2019, Canes Inc. purchased equipment classified as 5 Year property. The cost of the equipment...
In 2019, Canes Inc. purchased equipment classified as 5 Year
property. The cost of the equipment is $85,000 and the salvage
value is $5,000.
What is the MACRS Depreciation for Year 3?
On January 1, 2018, Aylmer Inc purchased a piece of equipment. The equipment is expected to...
On January 1, 2018, Aylmer Inc purchased a piece of equipment. The
equipment is expected to
produce
25,000 units over it's useful life. The equipment cost
$520,000.
Units
produced:
Other
IMPORTANT information:
2018
3000
Fair
value at:
2019
3200
31-Dec-20
$ 306,500
2020
3800
2021
4300
Balance
in Revaluation Surplus:
$
1,375
2022
3700
2023
3600
2024
3600
REQUIRED:
Prepare
all necessary journal entries at:
01-Jan-18
31-Dec-18
31-Dec-19
31-Dec-20
The units each year is posted. This is the only information...
The Collins Corporation purchased office equipment at the beginning of 2019 and capitalized a cost of...
The Collins Corporation purchased office equipment at the
beginning of 2019 and capitalized a cost of $2,200,000. This cost
included the following expenditures:
Purchase price
$
1,960,000
Freight charges
42,000
Installation charges
32,000
Annual maintenance charge
166,000
Total
$
2,200,000
The company estimated an eight-year useful life for the equipment.
No residual value is anticipated. The double-declining-balance
method was used to determine depreciation expense for 2019 and
2020.
In 2021, after the 2020 financial statements were issued, the
company decided...
The Collins Corporation purchased office equipment at the beginning of 2019 and capitalized a cost of...
The Collins Corporation purchased office equipment at the
beginning of 2019 and capitalized a cost of $2,308,000. This cost
included the following expenditures:
Purchase price
$
2,020,000
Freight charges
48,000
Installation charges
38,000
Annual maintenance charge
202,000
Total
$
2,308,000
The company estimated an eight-year useful life for the equipment.
No residual value is anticipated. The double-declining-balance
method was used to determine depreciation expense for 2019 and
2020.
In 2021, after the 2020 financial statements were issued, the
company decided...
The Collins Corporation purchased office equipment at the beginning of 2019 and capitalized a cost of...
The Collins Corporation purchased office equipment at the
beginning of 2019 and capitalized a cost of $2,344,000. This cost
included the following expenditures:
Purchase price
$
2,040,000
Freight charges
50,000
Installation charges
40,000
Annual maintenance charge
214,000
Total
$
2,344,000
The company estimated an eight-year useful life for the equipment.
No residual value is anticipated. The double-declining-balance
method was used to determine depreciation expense for 2019 and
2020.
In 2021, after the 2020 financial statements were issued, the
company decided...
Bolton, Inc. purchased equipment for $87,000 on January 1, 2018. The equipment is expected to have...
Bolton, Inc. purchased equipment for $87,000 on January 1,
2018. The equipment is expected to have a
five-year life and a residual value of $7,800.
Using the double-declining balance method, depreciation for
2019 would be:
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