Part A: (6 marks) Lower Niagara Company purchased equipment in 2021 for $80,000 and estimated an...

Part A:

Lower Niagara Company purchased equipment in 2021 for $80,000 and estimated an $8,000 residual value at the end of the equipment's 10-year useful life. At December 31, 2027, there was $50,400 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On March 31, 2028, the equipment was sold for $21,000.

Required Part A:

Prepare the appropriate journal entries to update accumulated depreciation and then to remove the equipment from the books of Lower Niagara Company on March 31, 2028.

Part B:

Guildwood Company sold a delivery truck for $11,000. The delivery truck originally cost $25,000 in 2021 and $6,000 was spent on a major overhaul in 2027 (charged to Delivery Truck account). Accumulated Depreciation on the delivery truck to the date of disposal was $20,000, December 31, 2027.

Required Part B:

Prepare the appropriate journal entry to record the disposition of the delivery truck.

Part C:

Crenshaw Company sold office equipment that had a net book value of $4,500 for $6,000. The office equipment originally cost $15,000.

Required Part C:

Prepare the appropriate journal entry to record the disposition of the office equipment.

Solutions

Expert Solution

ekkarill92 answered 1 year ago

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