91 Reporting and Recording the Disposal of a Long-Lived Asset (Straight-Line Depreciation) As part of a major renovation at the beginning of the year, Atiase Pharmaceuticals, Inc., sold shelving units (recorded as Equipment) that were 10 years old for $800 cash. The shelves originally cost $6,400 and had been depreciated on a straight-line basis over an estimated useful life of 10 years with an estimated residual value of $400. Assuming that depreciation has been recorded to the date of sale, show the effect of the disposal on the accounting equation. Prepare the journal entry to record the sale of the shelving units. LO 9-5 109.6

91 Reporting and Recording the Disposal of a Long-Lived Asset (Straight-Line Depreciation) As part of a major renovation at the beginning of the year, Atiase Pharmaceuticals, Inc., sold shelving units (recorded as Equipment) that were 10 years old for $800 cash. The shelves originally cost $6,400 and had been depreciated on a straight-line basis over an estimated useful life of 10 years with an estimated residual value of $400. Assuming that depreciation has been recorded to the date of sale, show the effect of the disposal on the accounting equation. Prepare the journal entry to record the sale of the shelving units. LO 9-5 109.6

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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Instructions Chart of Accounts General Journal Instructions Computer equipment (office equipment) purchased 6 1/2 years ago for $170,000, with an estimated life of 8 years and a residual value of $10,000, is now sold for $60,000 cash. (Appropriate entries for depreciation had been made for the first six years of use.) Required: Journalize the following entries: a. Record the depreciation for the one-half year prior to the sale, using the straight-line method. b. Record the sale of the equipment.* C. Assuming that the equipment had been sold for $25,000 cash, prepare the entry to record the sale.* *Refer to the Chart of Accounts for exact wording of account titles. Previous Next
A refrigerator used by a wholesale warehouse has a cost of $82,000, an estimated residual value of $6,200, and an estimated useful life of 8 years. What is the amount of the annual deprecdiation computed by the straight-line method? %24
Straight-Line Depreciation A refrigerator used by a wholesale warehouse has a cost of $64,000, an estimated residual value of $5,200, and an estimated useful life of 12 years. What is the amount of the annual depreciation computed by the straight-line method?
13 On January 1 of Year 1, a company purchased a piece of equipment for $1,200,000 that had an estimated useful life of 8 years and no salvage value. The equipment was depreciated by the double-decining-balance (DDB) method On January 1 of Year 3, the company changes to the straight-line method. Accumulated depreciation at the end of Year 2 is $525,000. If the straight-line method had been used, the accumulated depreciation at the end of Year 2 would have been $300,000. What is the retroactive adjustment to the accumulated depreciation account on January 1 of Year 3" $0 O $525,000 O $300,000 O $225,000
9. A company purchased and installed equipment on January 1 at a total cost of $72,000. Straight-line depreciation was calculated based on the estimate of a five-year life and no salvage value. The equipment was disposed of on January 1 of the fourth year. The company uses the calendar year. Prepare the general journal entry to record the disposal of the equipment under each of these independent situations: a. The equipment was sold for $29,000 cash. b. The equipment was sold for $21,000 cash.
Required information Skip to question [The following information applies to the questions displayed below.] Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $49,100. The machine's useful life is estimated at 10 years, or 401,000 units of product, with a $9,000 salvage value. During its second year, the machine produces 34,100 units of product. Determine the machine’s second-year depreciation and year end book value under the straight-line method.
An asset purchased 1 January 20x4, costing $10,000, with a 10-year useful life and no salvage value, was depreciated using the straight-line method during its first three years. During 20x7, the total useful life was re-estimated to be 17 years. What is the amount of depreciation expense in 20x8? Multiple Choice $500 $412
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