Pryce Company owns equipment that cost $68,600 when purchased on January 1, 2014

Question

Pryce Company owns equipment that cost $68,600 when purchased on January 1, 2014. It has been depreciated using the straight-line method based on estimated salvage value of $6,000 and an estimated useful life of 5 years.

Prepare Pryce Company’s journal entries to record the sale of the equipment in these four independent situations. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g.125. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

(a) Sold for $32,560 on January 1, 2017. (b) Sold for $32,560 on May 1, 2017. (c) Sold for $10,100 on January 1, 2017. (d) Sold for $10,100 on October 1, 2017. No. Account Titles and Explanation Debit Credit fa) To record depreciation) (To record sale of equipment) To record depreciation) (To record sale of equipment)

Explanation / Answer

Calculation of depreciatiom:

($68,600 - $6,000) / 5 = $12,520 depreciation per year

Accumulated Depreciation
January 1, 2017.
$12,520 x 3 = $37,560

May 1, 2017
$37,560 + ($12,520 x 4/12) = $41,733

October 1, 2017
$37,560 + ($12,520 x 9/12) = $46,950

No. Account Titles and Explanation Debit Credit (a) Cash $32,560 Accumulated Depreciation $37,560 Equipment $68,600 Gain on Sale $1,520 (b) Depreciation $4,173 Accumulated Depreciation $4,173 Cash $32,560 Accumulated Depreciation $41,733 Equipment $68,600 Gain on Sale $5,693 (c) Cash $10,100 Accumulated Depreciation $37,560 Loss on Sale $20,940 Equipment $68,600 (d) Depreciation $9,390 Accumulated Depreciation $9,390 Cash $10,100 Accumulated Depreciation $46,950 Loss on Sale $11,550 Equipment $68,600

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.