Pryce Company owns equipment that cost $72,750 when purchased on January 1, 2012

Question

Pryce Company owns equipment that cost $72,750 when purchased on January 1, 2012. It has been depreciated using the straight-line method based on estimated salvage value of $9,000 and an estimated useful life of 5 years.

Prepare Pryce Company’s journal entries to record the sale of the equipment in these four independent situations. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g.125.)

(a) Sold for $39,250 on January 1, 2015. (b) Sold for $39,250 on May 1, 2015. (c) Sold for $10,470 on January 1, 2015. (d) Sold for $10,470 on October 1, 2015.

Explanation / Answer

Solution:

Depreciation Schedule with Purchase price = $ 72,750 , salvage value = 9,000 , depreciable base = $ 63,750

Date Book value in the beginning Depreciation expense Accumulated depreciation Book value in the end Jan 1, 2012 72750 0 0 72750 Dec 31, 2012 72750 12,750 12,750 60,000 Jan 1, 2013 72750 12,750 12,750 60,000 Jan 1, 2014 60,000 12,750 25,500 47,250 Jan 1, 2015 47,250 12,750 38,250 34,500 May 1, 2015 34,500 4,250 42,500 30,250 October 1, 2015 30,250 6,375 48,875 23,875

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

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