Be Show Me How Calaistor eBook Entries for Sale of Fixed Asset Equipment acquire

Question

Be Show Me How Calaistor eBook Entries for Sale of Fixed Asset Equipment acquired on January at-cost of $94,870, has an estimated useful life of 12 years, has an estimated residual value of 9,550, and is depreciated by the straight-line mathod. a. What was the book value of the equipment at December 31 the end of the fourth year? Book value is the initial cost of the fixed asset minus the accumulated depreciation. Learning Obgective 3 b. Aszuming that the equipment was sold on April 1 of the fifth yeor for 59,407 1. Journalize the entry to record depreciation for the three months until the sale date. Round your answers to the nerest whole dollar if required. eedbeck The depreciation account of the fixed asset being old or discarded needs to be updated to reflect the months of u e in the year itis being discarded or :old. The straight-line method of depreciation calculates the amount of depreciation to be recognized each year Learning Obgective 3 check My Work Previous Next All work saved Save and Ext Submit Assignment for Grading

Explanation / Answer

Depreciation expense (cost - salvage value)/useful life (94,870-9,550)/12 7110 a) Book value at the end of fourth year original cost 94,870 less:Accumulated dep (7110*4) 28440 Book value at the end of fourth year 66,430 Answer b) 1) Depreciation expense 1,778 Accumulated depreciation 1778 (7110*3/12) Cash 58407 Accumulated dep (28440+1778) 30,218 loss on sale of Equipment 6,245 Equipment 94,870

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