Question

In: Accounting

Jackson’s Corporation purchased equipment at a cost of $500,000. The equipment has an estimated residual value...

Jackson’s Corporation purchased equipment at a cost of $500,000. The equipment has an estimated residual value of $50,000 and an estimated life of 5 years, or 10,000 hours of operation. The equipment was purchased on January 1, 2020 and was used 2,500 hours in 2020 and 2,100 hours in 2021. On January 1, 2022, the company decided to sell the equipment for $315,000. Jackson’s Corporation uses the units-of- production method to account for the depreciation on the equipment.

1.) Will the entry to record the sale of the equipment show a gain or loss?

2.) How much will the gain or loss be?

Solutions

Expert Solution

Hope this will be helpful


Related Solutions

Trainor Corporation purchased equipment at a cost of $500,000. The equipment has an estimated residual value...
Trainor Corporation purchased equipment at a cost of $500,000. The equipment has an estimated residual value of $50,000 and an estimated life of 5 years, or 10,000 hours of operation. The equipment was purchased on January 1, 2020 and was used 2,500 hours in 2020 and 2,100 hours in 2021. On January 1, 2022, the company decided to sell the equipment for $315,000. Trainor Corporation uses the units-of- production method to account for the depreciation on the equipment. Based on...
F Corporation purchased equipment for $450,000. Residual value at the end of the estimated 6 years...
F Corporation purchased equipment for $450,000. Residual value at the end of the estimated 6 years or 150,000 hours service life is expected to be $60,000. Using Straight-line depreciation, determine: Book value at the end of year 3      $_____ Using  180% declining balance depreciation, determine: Depreciation expense for year 2     $_____ Depreciation expense for year 3     $_____ Year Hours used 1 25,000 2 24,900 3 25,100 4 25,400 5 25,100 6 24,500 Using Activity based depreciation, determine: Depreciation expense for year 3    $____ Book value...
Trainex Corporation purchased equipment on January 1, 2020 at a cost of $500,000. The equipment has...
Trainex Corporation purchased equipment on January 1, 2020 at a cost of $500,000. The equipment has an estimated residual value of $50,000 and an estimated life of 5 years. At the end of two years, Trainex reevaluated the useful life of the equipment. Management extended the total useful life an additional 5 years but estimated that the equipment would have no residual value at the end of this time. If the company uses straight-line depreciation, what amount (in whole dollars)...
Trainor Corporation purchased equipment on January 1, 2020, at a cost of $500,000. The equipment has...
Trainor Corporation purchased equipment on January 1, 2020, at a cost of $500,000. The equipment has an estimated residual value of $50,000 and an estimated life of 5 years. At the end of two years, Trainor revaluated the useful life of the equipment. Management extended the total useful life an additional 5 years but estimated that the equipment would have no residual value at the end of this time. If the company uses straight-line depreciation, what amount would be recorded...
QUESTION 1 Equipment with a cost of $75,809.00, an estimated residual value of $4,582.00, and an...
QUESTION 1 Equipment with a cost of $75,809.00, an estimated residual value of $4,582.00, and an estimated life of 13 years was depreciated by the straight-line method for 4 years. Due to obsolescence, it was determined that the remaining useful life should be shortened by 3 years and the residual value changed to zero. The depreciation expense for the current and future years is QUESTION 2 The Boxwood Company sells blankets for $ 37.00 each. The following was taken from...
Partial-Year Depreciation Equipment acquired at a cost of $99,000 has an estimated residual value of $6,000...
Partial-Year Depreciation Equipment acquired at a cost of $99,000 has an estimated residual value of $6,000 and an estimated useful life of 10 years. It was placed into service on April 1 of the current fiscal year, which ends on December 31. If necessary, round your answers to the nearest cent. a. Determine the depreciation for the current fiscal year and for the following fiscal year by the straight-line method. Depreciation Year 1 $ Year 2 $ b. Determine the...
Jaguar Corporation purchased a machine that had an original cost of $60,000 and an estimated residual...
Jaguar Corporation purchased a machine that had an original cost of $60,000 and an estimated residual value of $10,000. The useful life was expected to be 8 years and straight-line depreciation is used. At December 31, 2006 (Jaguar’s annual year-end), the book value of the machine was $35,000. Jaguar Corporation sold the machine for $32,000 cash on October 1, 2007. Required: (A) Prepare the journal entry to record depreciation expense for 2007 at Oct 1, 2007 for the machine. Round...
A machine that cost $400,000 has an estimated residual value of $40,000 and an estimated useful...
A machine that cost $400,000 has an estimated residual value of $40,000 and an estimated useful life of four years. The company uses double-declining-balance depreciation. Required: 1. Calculate the machine's depreciable cost. 2. Calculate the machine's depreciation expense for each year. 3. Calculate the machine's accumulated depreciation and book value at the end of each year.
New equipment is purchased for $40,000. It has a residual value of at the end of...
New equipment is purchased for $40,000. It has a residual value of at the end of the 10 years $2,500.00. Desired rate of return 12%. Operating expenses are expected to be $2000.00 the first year and increase by $500.00 each year during the life of the equipment. Is this a good investment assuming equivalent annual methods.
A machine with a cost of $65,178.00 has an estimated residual value of $4,473.00 and an...
A machine with a cost of $65,178.00 has an estimated residual value of $4,473.00 and an estimated life of 6 years or 18,863 hours. It is to be depreciated by the units-of-production method. What is the amount of depreciation for the second full year, during which the machine was used 4,557 hours? Select the correct answer. $20,235.00 $15,745.97 $10,117.50 $14,665.36
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT