3 2 E16.11 McKain, Inc., closes its books on October 31 and prepares depreciation adjustments annually. On July 27, 2019, McKain sold some equipment with an original cost of $36,250 for $18,500. The equipment was purchased on November 4, 2014, and was depreciated using the straight- line method and had an estimated useful life of eight years and a salvage value of $1,650. Prepare the entries to update the depreciation and record the sale of the equipment. 3 E16.12 Nelson Enterprises exchanged a building it owned in C
3 2 E16.11 McKain, Inc., closes its books on October 31 and prepares depreciation adjustments annually. On July 27, 2019, McKain sold some equipment with an original cost of $36,250 for $18,500. The equipment was purchased on November 4, 2014, and was depreciated using the straight- line method and had an estimated useful life of eight years and a salvage value of $1,650. Prepare the entries to update the depreciation and record the sale of the equipment. 3 E16.12 Nelson Enterprises exchanged a building it owned in C
Chapter1: Financial Statements And Business Decisions
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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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2 E16.11 McKain, Inc., closes its books on October 31 and prepares depreciation adjustments annually.
On July 27, 2019, McKain sold some equipment with an original cost of $36,250 for $18,500.
The equipment was purchased on November 4, 2014, and was depreciated using the straight-
line method and had an estimated useful life of eight years and a salvage value of $1,650.
Prepare the entries to update the depreciation and record the sale of the equipment.
3 E16.12 Nelson Enterprises exchanged a building it owned in
C
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