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1. Prepare the journal entry to record the sale. 2. Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale.

1. Prepare the journal entry to record the sale. 2. Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale.

FINANCIAL ACCOUNTING
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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Howarth Manufacturing Company purchased equipment on June 30, 2020, at a cost of $135,000. The residual value of the equipment was estimated to be $15,000 at the end of a five-year life. The equipment was sold on March 31, 2024, for $40,000. Howarth uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service. Required: 1. Prepare the journal entry to record the sale. 2. Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale. Note: If no entry is required for altransaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculation. Round your final answers to the nearest whole dollar amount. General Journal No Answer is complete but not entirely correct. 1 Event 1 Cash Accumulated depreciation equipment. Equipment Gain on sale of equipment < Required 1 Maquired 2 • ✔ ✪ ♡ Debit 40,000 113,754 Credit 135,000 18,754
Transcribed Image Text:Howarth Manufacturing Company purchased equipment on June 30, 2020, at a cost of $135,000. The residual value of the equipment was estimated to be $15,000 at the end of a five-year life. The equipment was sold on March 31, 2024, for $40,000. Howarth uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service. Required: 1. Prepare the journal entry to record the sale. 2. Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale. Note: If no entry is required for altransaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculation. Round your final answers to the nearest whole dollar amount. General Journal No Answer is complete but not entirely correct. 1 Event 1 Cash Accumulated depreciation equipment. Equipment Gain on sale of equipment < Required 1 Maquired 2 • ✔ ✪ ♡ Debit 40,000 113,754 Credit 135,000 18,754
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