Fuji, Ltd. sold a computer on March 31,2014 for $30,000 that the company had pur

Question

Fuji, Ltd. sold a computer on March 31,2014 for $30,000 that the company had purchased for $52,000 on January 1,2012. The computer was depreciated on a straight-line basis over six years with a $4,000 salvage value. Assume depreciation was adjusted up to the date of sale. What is the entry to record the sale? 4. 5. Slick, Inc. paid S6,000 on April 1,2014 for an auto insurance policy that expires on March 31,2015. The company charged prepaid insurance. Assume no adjustments throughout the year. What is the adjusting entry on December 3 2014?

Explanation / Answer

4.

WN 1

Journal entries

5.

Cost of computer $ 52,000 Less: Salvage value $ (4,000) Depreciable value $ 48,000 Depreciation per year ($48,000/6) $    8,000 Depreciation upto 2013 ($8,000*2) $ 16,000 Depreication for 2014 ($8,000/12*3) $    2,000 Accumulated depreciation ($16,000+$2,000) $ 18,000

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