Question

*Exercise 9-10 Pryce Company owns equipment that cost $66,300 when purchased on January 1, 2012. It has been depreciated using the straight-line method based on estimated salvage value of $9,500 and an estimated useful life of 5 years. Prepare Pryce Company’s journal entries to record the sale of the equipment in these four independent situations. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g.125.) (a) Sold for $35,080 on January 1, 2015. (b) Sold for $35,080 on May 1, 2015. (c) Sold for $10,270 on January 1, 2015. (d) Sold for $10,270 on October 1, 2015. No. Account Titles and Explanation Debit Credit (a) (b) (To record depreciation) (To record sale of equipment) (c) (d) (To record depreciation) (To record sale of equipment)

Answer 1

	Answer:
	Depreciation expense per Year      =   ( Cost (-) Salvage Value ) / Useful Life      =    ( $ 66,300 (-) $ 9,500) / 5 Years      =    $ 11,360
Date / No.	Accounts Titles and Explanations	Debit	Credit
(a)	Cash	$ 35,080
	Accumulated depreciation    ( $ 11,360 x 3 Years)	$ 34,080
	Equipment		$ 66,300
	Gain on sale of equipment		$ 2,860
	(To record the sale of equipment)
b	Depreciation expense ( $ 11,360 x 4/12)	$ 3,787
	Accumulated depreciation		$ 3,787
	Cash	$ 35,080
	Accumulated depreciation    ( $ 11,360 x 3 Years) + $ 3,787	$ 37,867
	Equipment		$ 66,300
	Gain on sale of equipment		$ 6,647
	(To record the sale of equipment)
c	Cash	$ 10,270
	Accumulated depreciation    ( $ 11,360 x 3 Years)	$ 34,080
	Loss on sale of equipment	$ 21,950
	Equipment		$ 66,300
	(To record the sale of equipment)
d	Depreciation expense ( $ 11,360 x 9/12)	$ 8,520
	Accumulated depreciation		$ 8,520
	Cash	$ 10,270
	Accumulated depreciation    ( $ 11,360 x 3 Years) + $ 8,520	$ 42,600
	Loss on sale of equipment	$ 13,430
	Equipment		$ 66,300
	(To record the sale of equipment)