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a. Compute the depreciation on each machine (machine 1 and 2) to the date of disposal b. Calculate the book value at the date of sale and gain (loss) c. Refer to machine #1, prepare the journal entries in 2015 to record 2015 depreciation and the sale for machine #1

a. Compute the depreciation on each machine (machine 1 and 2) to the date of disposal b. Calculate the book value at the date of sale and gain (loss) c. Refer to machine #1, prepare the journal entries in 2015 to record 2015 depreciation and the sale for machine #1

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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Khalid Co. sold two machines in 2015. The following information pertains to the two machines: Purchase Useful Salvage Sales Machine Value Depreciation Life Price Cost Date Date Sold 5 yrs. Method #1 $66,000 7/1/11 $6,000 Straight- line 7/1/15 $15,000 #2 $50,000 7/1/14 5 yrs. $5,000 Double- |declining- 12/31/15 $30,000 balance Declining balance rate for depreciation method double declining balance is = 0.4 Required a. Compute the depreciation on each machine (machine 1 and 2) to the date of disposal b. Calculate the book value at the date of sale and gain (loss) c. Refer to machine #1, prepare the journal entries in 2015 to record 2015 depreciation and the sale for machine #1 Answer Date/Year BV at beginning Depr. Expense Acc. Depr BV. at the end 2014 2015
Transcribed Image Text:Khalid Co. sold two machines in 2015. The following information pertains to the two machines: Purchase Useful Salvage Sales Machine Value Depreciation Life Price Cost Date Date Sold 5 yrs. Method #1 $66,000 7/1/11 $6,000 Straight- line 7/1/15 $15,000 #2 $50,000 7/1/14 5 yrs. $5,000 Double- |declining- 12/31/15 $30,000 balance Declining balance rate for depreciation method double declining balance is = 0.4 Required a. Compute the depreciation on each machine (machine 1 and 2) to the date of disposal b. Calculate the book value at the date of sale and gain (loss) c. Refer to machine #1, prepare the journal entries in 2015 to record 2015 depreciation and the sale for machine #1 Answer Date/Year BV at beginning Depr. Expense Acc. Depr BV. at the end 2014 2015
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