o a new model. He had Venkat Engineering decided to dispose of his old industria
ID: 2547013 • Letter: O
Question
o a new model. He had Venkat Engineering decided to dispose of his old industrial evaporator and purchased the old evaporator on January 1, 2012 for $16,100. There was no salvage/residual value and the useful life Venkat had used was 5 years. Venkat depreciated his machinery using a Straight Line basis. On December 31, 2016, Venkat talked Chris into paying him $575 for the above referenced equipment. a) Calculate the Book Value at time of sale b) Calculate Venkat's gain or loss on this sale? Enter a loss as a negative value. c) Journalize this sale on Venkat's books on December 31, 2016 Date Description Debit Credit Dec 31Explanation / Answer
a) Straight line dep = 16100/5 = 3220 per year
Accumlated dep for 5 year = 3220*5 = 16100
book value at time of sale = 0
b) Gain on sale = 575-0 = 575
c) Journal entry :
Date Description debit credit Dec 31,2016 Accumlated depreciation 16100 Cash 575 Equipment 16100 Gain on sale of equipment 575Related Questions
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