ookmarks People Window Help [ 4% C) Fri 4:14 AM a 2 I Online teaching and learni

Question

ookmarks People Window Help [ 4% C) Fri 4:14 AM a 2 I Online teaching and learning resource from Cengage Learning Entries for sale of fixed asst First Question Journal Equipment aoquired on January 8 at a cost of $113,950, has an estimated usetal lite of 12 years, has an estmated resdual vate of $7,150, and is depreciated A What was the book value of the equipment at December 31 the and of the tourth year? B. Assuming thet the equipment was sold on Apnil 1 of the year for $69 655,joumalize the enties to record (T) depneciation for the three months unbthe sale date, and (2) the sale of the equipment Reter to the Chart of Accounts for exact wording of acccunt ies 2…Check My Work uses mnsm 20 p 0

Explanation / Answer

yearly depreciation on straight line method: 113950 - 7150 / 12 = $8900 per year A. Book value of the equipment at Dec 31, Fourth year = 113950 - (8900*4) = $78350 B. 1)Journal Entries: Depreciation of three months: 8900/4 = $2225 Debit $ Credit $ Apr 1, 5th year Depreciation expense 2225 Acc Depreciation - equipment 2225 2) Journal Entry: Sale of equipment in 5th year: Apr 1, 5th year Cash 69655 Acc Dep - equip 37825 Loss on sale of equipment 6470 Equipment 113950 (loss booked on sale of equipment)

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