Grace Company owns equipment that cost $70,000 when purchased on January 1, 2019. It has been...

Grace Company owns equipment that cost $70,000 when purchased on January 1, 2019. It has been depreciated using the straight-line method based on estimated salvage value of $7,000 and an estimated useful life of 5 years. Instructions: Prepare Grace Company’s journal entries to record the sale of the equipment in these four independent situations. Update depreciation on assets disposed of at time of sale.

(a) Sold for $40,000 on January 1, 2019.

(b) Sold for $40,000 on April 1, 2019.

(c) Sold for $15,000 on January 1, 2019.

(d) Sold for $15,000 on September 1, 2019.

(e) Repeat (a), assuming Grace uses double-declining balance depreciation.

(f) Repeat (c), assuming Grace uses double-declining balance depreciation.

Expert Solution

ekkarill92 answered 2 years ago

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