The following are independent situations. Faster Company purchased equipment in

Question

The following are independent situations. Faster Company purchased equipment in 2010 for $104,000 and estimated an $8,000 salvage value at the end of the equipment's 10-year useful life. At December 31, 2016, there was $67,200 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On March 31, 2017, the equipment was sold for $21,000 Prepare the appropriate journal entries to remove the equipment from the books of Faster Company on March 31, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation Debit Credit (To record depreciation expense for the first 3 months of 2014) 2. (To record sale of equipment)

Explanation / Answer

No. Account titles and Explanation Debit Credit 1 Depreciation expenses $2,400      Accumulated depreciation $2,400 (($104,000 - $8,000) /10 * 3/12) (To record depreciation expense for the first 3 months of 2014) 2 Account titles and Explanation Debit Credit Cash $21,000 Accumulated depreciation $69,600 Loss on sale of eqipment $13,400      Equipment $104,000 (To record sale of equipment) Account titles and Explanation Debit Credit Cash $11,000 Accumulated depreciation $20,000      Equipment $31,000 Account titles and Explanation Debit Credit Cash $15,000 Accumulated depreciation ($45,000 - $13,500) $31,500      Gain on sale of equipment $1,500       Equipment $45,000

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