Entries for Sale of Fixed Asset Equipment acquired on January 5 at a cost of $16
ID: 2527692 • Letter: E
Question
Entries for Sale of Fixed Asset Equipment acquired on January 5 at a cost of $161,180, has an estimated useful life of 18 years, has an estimated residual value of $9,800, and is depreciated by the straight-line method a. What was the book value of the equipment at December 31 the end of the fourth year? b. Assuming that the equipment was sold on April 1 of the fifth year for 119,112 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. 2. Journalize the entry to record the sale of the equipment. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations.Explanation / Answer
a) Depreciation per year = (161180-9800/18) = 8410 per year
Accumlated depreciation for 4 year = 8410*4 = 33640
Book value at the end of 4 year = 161180-33640 = 127540
Journal entry :
Date accounts & explanation debit credit Apr 1 Depreciation expense (8410*3/12) 2103 Accumlated depreciation 2103 (To record depreciation expense) Apr 1 Cash 119112 Accumlated depreciation (2103+33640) 35743 Loss on sale of equipment 6325 Equipment 161180 (To record sale of equipment)Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.