Exercise 9-10 Sheridan Company owns equipment that cost $64,400 when purchased o

Question

Exercise 9-10 Sheridan Company owns equipment that cost $64,400 when purchased on January 1, 2016. It has been depreciated using the straight-line method based on an estimated salvage value of $3,500 and an estimated useful life of 5 years Prepare Sheridan Company's journal entries to record the sale of the equipment in these four independent situations. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to O decimal places, e.g.125. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Sold for $31,540 on January 1, 2019 Sold for $31,540 on May 1, 2019 Sold for $10,200 on January 1, 2019. Sold for $10,200 on October 1, 2019. (a) (b) (c) (d) No. Account Titles and Explanation Debit Credit To record depreciation) To record sale of equipment)

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Cost of equipment               64,400.00 Salvage Value                 3,500.00 Life in years                         5.00 Depreciation = (64400 - 3500)/5               12,180.00 Depreciation for 3 years i.e.2016,2017,2018 = 12180*3               36,540.00 a) Cash Dr               31,540.00 Accumulated depreciation               36,540.00 To Equipment               64,400.00 To profit on sale of equipment = 31540+36540 - 64400                 3,680.00 b) Depreciation Dr                 4,060.00 To Accumulated depreciation                 4,060.00 (12180 * 4/12) Cash Dr               31,540.00 Accumulated depreciation               40,600.00 To Equipment               64,400.00 To profit on sale of equipment = 31540+ 40600 - 64400                 7,740.00 c) Cash Dr               10,200.00 Accumulated depreciation               36,540.00 Loss on Sale of equipment Dr = 64400 - 10200 -36540               17,660.00 To Equipment               64,400.00 d) Depreciation Dr                 9,135.00 To Accumulated depreciation                 9,135.00 (12180 * 9/12) Cash Dr               10,200.00 Accumulated depreciation               45,675.00 Loss on Sale of equipment Dr = 64400 - 10200 -45675                 8,525.00 To Equipment               64,400.00

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