Question

In: Accounting

Sale of Plant Asset Noble Company has a equipment that originally cost $65,000. Depreciation has been...

Sale of Plant Asset Noble Company has a equipment that originally cost $65,000. Depreciation has been recorded for six years using the straight-line method, with a $9,000 estimated salvage value at the end of an expected eight-year life. After recording depreciation at the end of six years, Noble sells the equipment. Prepare the journal entry to record the equipment’s sale for (Round to the nearest dollar): a. $28,000 cash b. $23,000 cash c. $19,000 cash General Journal Date Description Debit Credit a. Cash Equipment To record sale of equipment. b. Cash To record sale of equipment. c. Cash Accumulated Depreciation - Equipment To record sale of equipment.

Solutions

Expert Solution

  • Workings

A

Cost

$            65,000.00

B

Residual Value

$              9,000.00

C=A - B

Depreciable base

$            56,000.00

D

Life [in years]

8

E=C/D

Annual SLM depreciation

$              7,000.00

Year

Book Value

Depreciation expense

Ending Book Value

Accumulated Depreciation

1

$              65,000.00

$              7,000.00

$         58,000.00

$                7,000.00

2

$              58,000.00

$              7,000.00

$         51,000.00

$             14,000.00

3

$              51,000.00

$              7,000.00

$         44,000.00

$             21,000.00

4

$              44,000.00

$              7,000.00

$         37,000.00

$             28,000.00

5

$              37,000.00

$              7,000.00

$         30,000.00

$             35,000.00

6

$              30,000.00

$              7,000.00

$         23,000.00

$             42,000.00

  • [a]

Accounts Titles

Debit

Credit

Cash

$     28,000.00

   Accumulated Depreciation - Equipment

$     42,000.00

   Gain on sale/disposal

$      5,000.00

   Equipment

$    65,000.00

(to record sale)

  • [b]

Accounts Titles

Debit

Credit

Cash

$     23,000.00

   Accumulated Depreciation - Equipment

$     42,000.00

   Equipment

$    65,000.00

(to record sale)

  • [c]

Accounts Titles

Debit

Credit

Cash

$     19,000.00

   Accumulated Depreciation - Equipment

$     42,000.00

Loss on sale/disposal

$       4,000.00

   Equipment

$    65,000.00

(to record sale)

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Sale of Plant Asset Shannon Company has a equipment that originally cost $68,000. Depreciation has been...
Sale of Plant Asset Shannon Company has a equipment that originally cost $68,000. Depreciation has been recorded for six years using the straight-line method, with a $9,000 estimated salvage value at the end of an expected eight-year life. After recording depreciation at the end of six years, Shannon sells the equipment. Prepare the journal entry to record the equipment’s sale for (Round to the nearest dollar): a. $30,000 cash b. $23,750 cash c. $21,000 cash General Journal Date Description Debit...
Sale of Plant Asset Lone Pine Company has a machine that originally cost $60,000. Depreciation has...
Sale of Plant Asset Lone Pine Company has a machine that originally cost $60,000. Depreciation has been recorded for four years using the straight-line method, with a $5,000 estimated salvage value at the end of an expected ten-year life. After recording depreciation at the end of four years, Lone Pine sells the machine. Prepare the journal entry to record the machine’s sale for (Round to the nearest dollar): a. $39,000 cash b. $38,000 cash c. $28,000 cash
E 9-7A. Sale of Plant Asset Raine Company has a machine that originally cost $58,000.  Depreciation has...
E 9-7A. Sale of Plant Asset Raine Company has a machine that originally cost $58,000.  Depreciation has been recorded for four years using the straight-line method, with a $5,000 estimated salvage value at the end of an expected ten-year life.  After recording depreciation at the end of four years, Raine sells the machine.  Prepare the journal entry to record the machine's sale for: a. $37,000 cash b. $36,800 cash c. $28,000 cash Debit Account Credit Account Debit Amount Credit Amount a. Debit Account...
Plant equipment originally costing $32,400, on which $21,600 of up-to-date depreciation has been accumulated, was sold...
Plant equipment originally costing $32,400, on which $21,600 of up-to-date depreciation has been accumulated, was sold for $8,100. a.  Prepare the journal entry to record the sale. b.  Prepare the entry to record the sale of the equipment if $90 of removal costs were incurred to allow the equipment to be moved.
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of...
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of $718,750 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $61,800. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On March 4 of Year 5, the equipment was sold for $105,300. Required: 1. Determine the annual depreciation expense...
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of...
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of $656,250 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $56,400. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On March 4 of Year 5, the equipment was sold for $96,100. Required: 1. Determine the annual depreciation expense...
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of...
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of $625,000 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $53,700. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On March 4 of Year 5, the equipment was sold for $91,500. Required: 1. Determine the annual depreciation expense...
Disposal of Plant Asset Citano Company has a used executive charter plane that originally cost $850,000....
Disposal of Plant Asset Citano Company has a used executive charter plane that originally cost $850,000. Straight-line depreciation on the plane has been recorded for six years, with a $70,000 expected salvage value at the end of its estimated eight-year useful life. The last depreciation entry was made at the end of the sixth year. Eight months into the seventh year, Citano disposes of the plane. Required Prepare journal entries to record: a. Depreciation expense to the date of disposal....
Depreciation by Two Methods; Sale of Fixed Asset New tire retreading equipment, acquired at a cost...
Depreciation by Two Methods; Sale of Fixed Asset New tire retreading equipment, acquired at a cost of $812,500 on September 1 at the beginning of a fiscal year, has an estimated useful life of five years and an estimated residual value of $69,900. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining-balance method was selected. In the first week...
Disposal of Plant Asset Canyon Company has a used delivery truck that originally cost $54,200. Straight-line...
Disposal of Plant Asset Canyon Company has a used delivery truck that originally cost $54,200. Straight-line depreciation on the truck has been recorded for three years, with a $2,000 expected salvage value at the end of its estimated six-year useful life. The last depreciation entry was made at the end of the third year. Four months into the fourth year, Canyon disposes of the truck. Required Prepare journal entries to record: a. Depreciation expense to the date of disposal. b....
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT