Question
In: Accounting
Equipment was acquired at the beginning of the year at a cost of $38,500. The equipment...
Equipment was acquired at the beginning of the year at a cost of $38,500. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of ten years and an estimated residual value of $750.
a. What was the depreciation for the first
year?
$
b. Assuming the equipment was sold at the end
of year 2 for $8,900, determine the gain or loss on the sale of the
equipment.
$ Loss
Feedback
Book value is the asset cost minus accumulated depreciation. In the first year, the balance in the accumulated depreciation account is zero.
Compare the book value to the sale price. If the book value is more than the sale price, the equipment was sold for a loss. If the book value is less than the sale price, the equipment was sold for a gain.
c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.
| Cash | |||
| Accumulated Depreciation-Equipment | |||
| Loss on Sale of Equipment | |||
| Equipment |
Solutions
ekkarill92 answered 2 years agoRelated Solutions
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