Office equipment was purchased 6 1/2 years ago for $250,000, with an estimated life of 8...

Office equipment was purchased 6 1/2 years ago for $250,000, with an estimated life of 8 years and a residual value of $10,000, is now sold for $45,000 cash. (Appropriate entries for depreciation had been made for the first six years of use.) Journalize the following entries:

(10 points)

(a)	Record the depreciation for the one-half year prior to the sale, using the straight-line method.
(b)	Record the sale of the equipment.

Solutions

Expert Solution

Answer to Part a:

Straight Line Depreciation per year = (Cost – Residual value) / Useful Life
Straight Line Depreciation per year = ($250,000 - $10,000) / 8
Straight Line Depreciation per year = $30,000

Depreciation Expense for one-half year = $30,000 * 1 / 2
Depreciation Expense for one-half year = $15,000

ekkarill92 answered 1 year ago

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