The property, plant, and equipment section of the Jasper Company's December 31, 2023, balance sheet contained the following:Property, plant, and equipment:LandBuildingLess: Accumulated depreciationEquipmentLess: Accumulated depreciationTotal property, plant, and equipmentMachine101102103Cost$ 48,40079,00020,000Date Acquired1/1/20216/30/20229/1/2023$ 780,000(150,000)147,400ResidualValue$6,0007,0002,000?The land and building were purchased at the beginning of 2019. Straight-line depreciation is used and a residual value of $30,000 forthe building is anticipated.The equipment is comprised of the following three machines:$ 110,000Life (inYears)898630,000??The straight-line method is used to determine depreciation on the equipment. On March 31, 2024, Machine 102 was sold for $54,000.Early in 2024, the useful life of machine 101 was revised to five years in total, and the residual value was revised to zero.Required:1. Calculate the accumulated depreciation on the equipment at December 31, 2023.2. Prepare the journal entry to record 2024 depreciation on machine 102 up to the date of sale.3. Calculate the gain or loss on the sale of machine 102.4. Prepare the journal entry for the sale of machine 102.5. Prepare the 2024 year-end journal entries to record depreciation on the building and remaining equipment.

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Description: The property, plant, and equipment section of the Jasper Company's December 31, 2023, balance sheet contained the following:Property, plant, and equipment:LandBuildingLess: Accumulated depreciationEquipmentLess: Accumulated depreciationTotal propert

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1. Calculate the accumulated depreciation on the equipment at December 31, 2023.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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Question

The property, plant, and equipment section of the Jasper Company's December 31, 2023, balance sheet contained the following:
Property, plant, and equipment:
Land
Building
Less: Accumulated depreciation
Equipment
Less: Accumulated depreciation
Total property, plant, and equipment
Machine
101
102
103
Cost
$ 48,400
79,000
20,000
Date Acquired
1/1/2021
6/30/2022
9/1/2023
$ 780,000
(150,000)
147,400
Residual
Value
$
6,000
7,000
2,000
?
The land and building were purchased at the beginning of 2019. Straight-line depreciation is used and a residual value of $30,000 for
the building is anticipated.
The equipment is comprised of the following three machines:
$ 110,000
Life (in
Years)
8
9
8
630,000
?
?
The straight-line method is used to determine depreciation on the equipment. On March 31, 2024, Machine 102 was sold for $54,000.
Early in 2024, the useful life of machine 101 was revised to five years in total, and the residual value was revised to zero.
Required:
1. Calculate the accumulated depreciation on the equipment at December 31, 2023.
2. Prepare the journal entry to record 2024 depreciation on machine 102 up to the date of sale.
3. Calculate the gain or loss on the sale of machine 102.
4. Prepare the journal entry for the sale of machine 102.
5. Prepare the 2024 year-end journal entries to record depreciation on the building and remaining equipment.

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Step 2: Requirement 1- Calculation of accumulated depreciation on equipment on December 31, 2023:

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Step 3: Requirement 2- Journal entry for recording the depreciation on machine 102 in 2024:

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Step 4: Requirement 3- Calculation of gain or loss on sale of machine 102:

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