Question

In: Accounting

Entries for Sale of Fixed Asset Equipment acquired on January 8 at a cost of $160,090,...

Entries for Sale of Fixed Asset

Equipment acquired on January 8 at a cost of $160,090, has an estimated useful life of 18 years, has an estimated residual value of $7,450, and is depreciated by the straight-line method.

a. What was the book value of the equipment at December 31 the end of the fourth year?
$

b. Assuming that the equipment was sold on April 1 of the fifth year for 118,680.

1. Journalize the entry to record depreciation for the three months until the sale date. Round your answers to the nerest whole dollar if required.

2. Journalize the entry to record the sale of the equipment. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations.

Solutions

Expert Solution

(a).

Book value of the equipment at December 31 the end of the fourth year = $126170

Explanation;

Cost of equipment = $160090

Residual value = $7450

Useful life = 18 years

Per year depreciation ($160090 – $7450) / 18 = $8480

Hence accumulated depreciation for 4 years (4 * $8480) = $33920

Book value at December 31 the end of fourth year ($160090 - $33920) = $126170

(b).

1.

Date

Accounts Title & Explanation

Debit

Credit

April 1

Depreciation expense-equipment

$2120

     Accumulated Deppreciation-equipment

$2120

(To record depreciation expense for 3 months)

Working Note;

Annual depreciation = $8480

Depreciation for 3 months ($8480 * 3 / 12) = $2120

2.

Date

Accounts Title & Explanation

Debit

Credit

April 1

Cash

$118680

Accumulated depreciation-equipment

$36040

Loss on sale

$5370

     Equipment

$160090

(To record sale of equipment)

Working Note;

1.

Annual depreciation = $8480

Accumulated depreciation at the time of sale ($8480 * 4) + $2120

= $36040

2.

Loss on sale of equipment will be calculated as follow;

Sale price + Accumulated depreciation – cost

$118680 + $36040 - $160090 = $5370


Related Solutions

Entries for Sale of Fixed Asset Equipment acquired on January 8 at a cost of $132,750...
Entries for Sale of Fixed Asset Equipment acquired on January 8 at a cost of $132,750 has an estimated useful life of 15 years, has an estimated residual value of $7,050, and is depreciated by the straight-line method. a. What was the book value of the equipment at December 31 the end of the fourth year? $ b. Assume that the equipment was sold on April 1 of the fifth year for $91,965. 1. Journalize the entry to record depreciation...
Entries for Sale of Fixed Asset Equipment acquired on January 8 at a cost of $170,450...
Entries for Sale of Fixed Asset Equipment acquired on January 8 at a cost of $170,450 has an estimated useful life of 20 years, has an estimated residual value of $7,450, and is depreciated by the straight-line method. a. What was the book value of the equipment at December 31 the end of the fourth year? $fill in the blank 6f412ff47fb6faf_1 b. Assume that the equipment was sold on April 1 of the fifth year for $130,562. 1. Journalize the...
Entries for Sale of Fixed Asset Equipment acquired on January 8 at a cost of $128,910...
Entries for Sale of Fixed Asset Equipment acquired on January 8 at a cost of $128,910 has an estimated useful life of 14 years, has an estimated residual value of $7,950, and is depreciated by the straight-line method. a. What was the book value of the equipment at December 31 the end of the fourth year? $ b. Assume that the equipment was sold on April 1 of the fifth year for $86,090. 1. Journalize the entry to record depreciation...
2) Entries for Sale of Fixed Asset Equipment acquired on January 8 at a cost of...
2) Entries for Sale of Fixed Asset Equipment acquired on January 8 at a cost of $189,070, has an estimated useful life of 19 years, has an estimated residual value of $8,950, and is depreciated by the straight-line method. a. What was the book value of the equipment at December 31 the end of the fourth year? $ b. Assuming that the equipment was sold on April 1 of the fifth year for 142,855. 1. Journalize the entry to record...
Entries for Sale of Fixed Asset Equipment acquired on January 8 at a cost of $136,830,...
Entries for Sale of Fixed Asset Equipment acquired on January 8 at a cost of $136,830, has an estimated useful life of 16 years, has an estimated residual value of $8,350, and is depreciated by the straight-line method. a. What was the book value of the equipment at December 31 the end of the fourth year? $ b. Assuming that the equipment was sold on April 1 of the fifth year for 97,682. 1. Journalize the entry to record depreciation...
Entries for Sale of Fixed Asset Equipment acquired on January 8 at a cost of $176,530...
Entries for Sale of Fixed Asset Equipment acquired on January 8 at a cost of $176,530 has an estimated useful life of 17 years, has an estimated residual value of $9,250, and is depreciated by the straight-line method. a. What was the book value of the equipment at December 31 the end of the fourth year? b. Assume that the equipment was sold on April 1 of the fifth year for $129,660. 1. Journalize the entry to record depreciation for...
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...
Sale of Asset Equipment acquired on January 9, 20Y3, at a cost of $475,000, has an...
Sale of Asset Equipment acquired on January 9, 20Y3, at a cost of $475,000, has an estimated useful life of 15 years, an estimated residual value of $85,500, and is depreciated by the straight-line method. a. What was the book value of the equipment at the end of the fifth year, December 31, 20Y7? Round your interim calculations and final answer to the nearest dollar. $ For decreases in accounts or outflows of cash, enter your answers as negative numbers....
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...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT