Homework: Week 6- Chapter 09 exercises Save Score: 0 of 1 pt 70f 9 (3 complete)

Question

Homework: Week 6- Chapter 09 exercises Save Score: 0 of 1 pt 70f 9 (3 complete) ? HW Score: 29.21%, 2.63 019 pts E10-22 (similar to) Question Help On January 2, 2015, Family Clothing Consignments purchased showroom fixtures for $15,000 cash, expecting the foxtures to remain in service for five years. Family has depreciated the fodures on a double-declining-balance basis, with zero residual value. On September 30, 2016, Family sold the foxtures for $7,000 cash. Record both depreciation expense for 2016 and sale of the foctures on September 30, 2016. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Begin by recording the depreciation expense for 2016 Date Accounts and Explanation Credit Sep. 30 Depreciation Expense Fictures To record depreciation on fixtures Choose from any list or enter any number in the input fields and then click Check Answer 2 Clear All Check

Explanation / Answer

Step 1: Calculation of rate of depreciation under double declining method Cost of the asset 15000 Residual Value 0 Life of the asset 5 Years Depreciation under straight line method (15000/5) 3000 Rate of depreciation under Straigh tline method [(3000/15000)*100] 20% Rate of depreciation under Double declining method (20%*2) 40% step 2: Calculation of Accumulated Depreciation Year Book Value at the Beginning of the year Depreciation Percent Depreciation Expense Accumulated Depreciation Book value of the end of the year 2015 15000 40% 6000 6000 9000 (6000*40%) (15000 - 9000) 2016 9000 40% 2700 8700 6300 (15000 - 9000) (9000*40%*9/12) (6000+2700) (9000 - 2700) Step 3: Calculation of gain on sale of Fixtures Cash Received 7000 Less: Book Value of the asset 6300 Gain on sale of asset 700 Step 4: Date Accounts and Expalnation Debit Credit Sep-30 Depreciation - Fixtures 2700 Accumulated Depreciation - Fixtures 2700 To Record depreciation on fixtures Sep-30 Cash 7000 Accumulated Depreciation - Fixtures 8700 Fixtures 15000 Gain on sale of Fixtures 700 To record gain on sale of Fixtures

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.