A company purchased a back hoe at a cost of $39,000 and sold it two years later for $25,700. Depreciation was recorded using thestraight-line method, a five-year service life, and an $9,000 residual value.1. What was the gain or loss on the sale?2. Record the sale.Complete this question by entering your answers in the tabs below.Required 1 Required 2What was the gain or loss on the sale?on sale< Required 1Required 2 >

Lets understand the basics.Depreciation is a reduction in value of asset due to wear and tear,…

A company purchased a back hoe at a cost of $39,000 and sold it two years later for $25,700. Depreciation was recorded using the straight-line method, a five-year service life, and an $9,000 residual value. What was the gain or loss on the sale? 2. Record the sale. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What was the gain or loss on the sale? on sale Required 1 Required 2 >

A company purchased a back hoe at a cost of $39,000 and sold it two years later for $25,700. Depreciation was recorded using the straight-line method, a five-year service life, and an $9,000 residual value. What was the gain or loss on the sale? 2. Record the sale. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What was the gain or loss on the sale? on sale Required 1 Required 2 >

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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Please answer with detailed explanation On September 1, Sparky Co. sold a building for $75,000. The building originally cost $250,000 and had accumulated depreciation of $180,000 as of the date of sale. What would the journal entry to record the sale include? Credit to Accumulated Depreciation for $180,000 Debit to gain for $5,000 Credit to Building for $75,000 Debit to loss for $5,000 Credit to gain for $5,000
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Your staff person has provided you with the following journal entry for January 20x1 depreciation. The monthly deprecation is supposed to be $100.00. What is wrong with this entry?
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Required information Skip to question [The following information applies to the questions displayed below.] Onslow Company purchased a used machine for $144,000 cash on January 2. On January 3, Onslow paid $ 8,000 to wire electricity to the machine. Onslow paid an additional $1,600 on January 4 to secure the machine for operation. The machine will be used for six years and have a $17, 280 salvage value. Straight line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of. 3. Prepare journal entries to record the machine's disposal under each separate situation: (a) it is sold for $24, 500 cash and (b) it is sold for $98, 000 cash.
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Murphy Limited purchased a $30,000 asset with a five‐year life expectancy and no salvage value. Two alternative methods of calculating depreciation expense are presented below.Method A Method BYear1 $3,000 $6,0002 6,000 9,6003 ? ?Required:1. Identify the method of depreciation and compute the depreciation expense for the third year under each method.2. The chief financial officer of Murphy considers depreciation to be nothing more than an arbitrary calculation, based on unreliable estimates. She proposes to use method B for years 1 and 2 and method A for years 3, 4, and 5. In this way, she can deduct the maximum depreciation each year over the life of the asset. Is her proposal acceptable? Why or why not?3. What factors should be considered in choosing a method ofdepreciation?
Find the depreciation for the third year using MACRS cost-recovery rates for the property placed in service at midyear. The property is a 3-year property and was purchased for $98,452. Click the icon to view a table of MACRS rates. X The depreciation is $. (Round to the nearest cent as needed.) MACRS Table Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 3-Year 33.33% 44.45 14.81 7.41 Depreciation rate for recovery perioa 5-Year 7-Year 10-Year 15-Year 20.00% 10.00% 5.00% 14.29% 32.00 19.20 11.52 11.52 5.76 24.49 17.49 12.49 8.93 8.92 8.93 4.46 18.00 14.40 11.52 9.22 7.37 6.55 6.55 6.56 6.55 3.28 9.50 8.55 7.70 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 20-Year 3.750% 7.219 6.677 6.177 5.713 5.285 4.888 4.522 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461
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Can you show me step by step this one too? 13. ABC Inc. purchased a truck on January 1, 2018 for $40,000. The truck had an estimated life of six years and anestimated salvage value of $4,000. ABC uses the straight-line method to depreciate the asset. On July 1, 2020, the truck was sold for $14,000 cash. A. Determine the effect on the accounting equation upon recording the depreciation for 2018. Assets = Liabilities + Stockholders’ Equity Revenues – Expenses =Net Income B. Calculate the gain or loss on the sale of the asset.
A new vehicle was purchased on January 1 for $42,000. It has a salvage value of $9,000 and a useful life of 5 years. To the nearest dollar, how much will the depreciation expense for the vehicle be for the first year using the straight – line method? (Round the final answer to the nearest dollar.) O A. $6,600 O B. $700 OC. $550 O D. $8,400