Equipment acquired on January 4, 2013, at a cost of $140,000, has an estimated useful life...

Equipment acquired on January 4, 2013, at a cost of $140,000, has an estimated useful life of 16 years, has an estimated residual value of $8,000, and is depreciated by the straight-line method.

Blank 1: What is the book value of the equipment at December 31, 2016, the end of the year? (Hint: pay close attention to the dates.)

Blank 2: Assume that the equipment was sold on July 1, 2017, for $96,700. Enter the amount of any gain or loss on the sale of equipment.

Enter your answer as a number only - no punctuation ($ , .). For example, if your answer is 115,000, enter 115000 in the blank.

Blank # 1
Blank # 2

Solutions

Expert Solution

Calculation of book value of equipment
Depreciation per year	(Cost - Residual value)/Estimated useful life
Depreciation per year	(140000-8000)/16
Depreciation per year	$8,250

Accumulated depreciation up to 4 years	8250*4
Accumulated depreciation up to 4 years	$33,000

Book value of equipment at 31st Dec 2016	Cost - Accumulated depreciation
Book value of equipment at 31st Dec 2016	140000-33000
Book value of equipment at 31st Dec 2016	$107,000

Depreciation for 6 months	(8250*6/12)
Depreciation for 6 months	$4,125

Book value of asset as on 01st July 2017	107000-4125
Book value of asset as on 01st July 2017	$102,875

Gain (loss) on sale of equipment	Sale proceeds - Book value
Gain (loss) on sale of equipment	96700-102875
Gain (loss) on sale of equipment	-$6,175

Thus, loss on sale of equipement is $6,175

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Equipment acquired on January 6 at a cost of $335,190, has an estimated useful life of...

Equipment acquired on January 6 at a cost of $335,190, has an estimated useful life of 13 years and an estimated residual value of $68,690. Required: a. What was the annual amount of depreciation for Years 1-3 using the straight-line method of depreciation? b. What was the book value of the equipment on January 1 of Year 3? c. Assuming that the equipment was sold on January 3 of Year 4 for $256,655, journalize the entry to record the sale....

Equipment acquired on January 6 at a cost of $335,190, has an estimated useful life of...

Equipment acquired on January 6 at a cost of $335,190, has an estimated useful life of 13 years and an estimated residual value of $68,690. A. What was the annual amount of depreciation for the Years 1-3 using the straight-line method of depreciation? B. What was the book value of the equipment on January 1 of Year 4? C. Assuming that the equipment was sold on January 3 of Year 4 for $256,655, journalize the entry to record the sale....

Equipment acquired on January 8 at a cost of $101,300 has an estimated useful life of...

Equipment acquired on January 8 at a cost of $101,300 has an estimated useful life of 13 years, has an estimated residual value of $9,000, 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 $64,700. 1. Journalize the entry to record depreciation for the three months until the...

Equipment acquired on January 8 at a cost of $101,130 has an estimated useful life of...

Equipment acquired on January 8 at a cost of $101,130 has an estimated useful life of 13 years, has an estimated residual value of $10,000, 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 $65,197. 1. Journalize the entry to record depreciation for the three months until the...

Equipment acquired on January 8 at a cost of $144,930 has an estimated useful life of...

Equipment acquired on January 8 at a cost of $144,930 has an estimated useful life of 14 years, has an estimated residual value of $8,850, and is depreciated by the straight-line method. a. What was the book value of the equipment at December 31 the end of the fifth year? b. Assuming that the equipment was sold on April 1 of the sixth year for $88,570, journalize the entries to record (1) depreciation for the three months until the sale...

Equipment acquired on January 5 at a cost of $151,710, has an estimated useful life of...

Equipment acquired on January 5 at a cost of $151,710, has an estimated useful life of 16 years, has an estimated residual value of $9,950, 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 107,900. 1. Journalize the entry to record depreciation for the three months until the...

Equipment acquired on January 6,2013, at a cost of 405,115, has an estimated useful life of...

Equipment acquired on January 6,2013, at a cost of 405,115, has an estimated useful life of 16 years and an estimated residual value of 61,595. Required: A). What was the annual amount of depreciation for the years 2013,2014,and 2015 using the straight line method of depreciation? B). What was the book value of the equipment on January 1, 2016 C). Assuming that the equipment was sold on January 3,2016 for $325,545 journalize the entry to record the sale. Refer to...

Equipment acquired on January 8 at a cost of $212,000 has an estimated useful life of...

Equipment acquired on January 8 at a cost of $212,000 has an estimated useful life of 15 years, has an estimated residual value of $14,000, and is depreciated by the straight-line method. a. What was the book value of the equipment at December 31 the end of the fifth year? Assume that the equipment was sold on April 1 of the sixth year for $105,800. 1. Journalize the entry to record depreciation for the three months until the sale date....

A copy machine acquired with a cost of $1,900 has an estimated useful life of 4...

A copy machine acquired with a cost of $1,900 has an estimated useful life of 4 years. It is also expected to have a useful operating life of 10,000 copies. Assuming that it will have a salvage value of $100, determine the depreciation for the first year and second year by the (15 points) (a) straight-line method (b) double-declining-balance method (c) units-of-output method (4,500 copies were made the first year 3,200 copies second year)

A copy machine acquired with a cost of $1,410 has an estimated useful life of 4...

A copy machine acquired with a cost of $1,410 has an estimated useful life of 4 years. It is also expected to have a useful operating life of 13,350 copies. Assuming that it will have a salvage value of $75, determine the depreciation for the first year and second year by the (15 points) (a) straight-line method (b) double-declining-balance method (c) units-of-output method (4,500 copies were made the first year 3,200 copies second year

Subjects