Question

	Miley Enterprises sold equipment for $8,000 on March 1, 2019.
	The equipment had cost $24,000.
	The balance in the accumulated depreciation account at December 31, 2019 was $17,000.
	Depreciation expense per month is $1,000.
	Prepare the 2 journal entries that Miley would make to record the sale of this equipment.

	The December 2019 Balance Sheet of Cooper Company showed Equipment of $64,000
	and Accumulated Depreciation of $18,000 before depreciation is recorded for 2019.
	On December 31, 2019, the company decided that the equipment has a remaining useful life
	of 6 years with a $4,000 salvage value.
	Prepare the journal entry to record the revised depreciation expense at December 31, 2019.

Answer 1

• Requirement #1: Miley Enterprise

Date	Accounts title	Debit	Credit
01-Mar-19	Depreciation Expense - Equipment	$2,000
	Accumulated Depreciation - Equipment		$2,000
	(to update 2 month depreciation = 1000 x 2)
01-Mar-19	Cash	$8,000
	Accumulated Depreciation - Equipment [17000 + 2000]	$19,000
	Gain on Sale		$3,000
	Equipment		$24,000
	(to record sale)

• Requirement 2 Cooper Company

Date	Accounts title	Debit	Credit
31-Dec-19	Depreciation Expense - Equipment	$7,000
	Accumulated Depreciation - Equipment		$7,000
	(to record revised depreciation)

--Workings

A	Original cost	$64,000
B	Accumulated depreciation	$18,000
C = A-B	Book value at time of revision	$46,000
D	New salvaga value	$4,000
E = C-D	New depreciable base	$42,000
F	Remaining life	6
G = E/F	Revised depreciation expense	$7,000