Question 1 Equipment was acquired at the beginning of the year at a cost of $352
ID: 2448561 • Letter: Q
Question
Question 1
Equipment was acquired at the beginning of the year at a cost of $352,795. The equipment was depreciated using the straight-line method based on an estimated useful life of 12 years and an estimated residual value of $43,195.
A. What was the depreciation for the first year?
B. Assuming the equipment was sold at the end of the tenth year for $87,300, determine the gain or loss on the sale of the equipment.
C. Journalize the entry to record the sale. Refer to the Chart of Accounts for exact wording of account titles.
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Required: A. What was the depreciation for the first year? B. Assuming the equipment was sold at the end of the tenth year for $87,300, determine the gain or loss on the sale of the equipment. C. Journalize the entry to record the sale. Refer to the Chart of Accounts for exact wording of account titles.Explanation / Answer
A . depreciation = cost of asset - salvage value / estimated life of asset
= 352795 - 43195 / 12
= 25800
cost of asset 352795
depreciation (25800)
value of asset at the 326995
end of the year
B. cost of the asset 352795
depreciation (25800)
value of the asset at the end of 1 year 326995
depreciation (25800)
value of the asset at the end of 2 year 301195
depreciation (25800)
value of the asset at the end of 3 year 275395
depreciation (25800)
value of the asset at the end of 4 year 249595
depreciation (25800)
value of the aseet at the end of 5 year 223795
depreciation (25800)
value of the asset at the end of 6 year 197995
depreciation (25800)
value of the asset at the end of 7 year 172195
depreciation (25800)
value of the asset at the end of 8 year 146395
depreciation (25800)
value of the asset at the end of 9 year 120595
depreciation (25800)
value of the asset at the end of 10 year 94795
sale of asset (87300)
loss of asset 7495
C. Cash account 87300
loss on equipment account 7495
To equipment account 94795.
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