The following are some transactions of Lake Company for 2024. Lake Company uses straight-line depreciation and has a December 31 year end. Apr. 1Retired a piece of equipment that was purchased on January 1, 2015, for $45,000. The equipment had an expected useful life of 10 years with no residual value.July 30Sold equipment for $1,100 cash. The equipment was purchased on January 3, 2022, for $12,600 and was depreciated over an expected useful life of 3 years with no residual value.Nov 1.Traded in an old vehicle for a new vehicle, receiving a $10,000 trade-in allowance and paying $36,000 cash. The old vehicle had been purchased on Nov 1, 2018, at a cost of $35,000. The estimated useful life was 8 years and the estimated residual value was $5,000. The fair value of the old vehicle was $7,000 on Nov 1, 2024a) For each of these disposals, prepare a journal entry to record depreciation from January 1, 2024, to the date of disposal, if required.b) Record the disposals.Calculate gain or loss on disposal.Please show all steps.

Straight Line Depreciation = (Purchase Price - Salvage Value) / LifeBookValue of Asset = Purchase…

Answered: a) For each of these disposals, prepare…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Chapter1: Financial Statements And Business Decisions

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The following are some transactions of Lake Company for 2024. Lake Company uses straight-line depreciation and has a December 31 year end.

Apr. 1	Retired a piece of equipment that was purchased on January 1, 2015, for $45,000. The equipment had an expected useful life of 10 years with no residual value.
July 30	Sold equipment for $1,100 cash. The equipment was purchased on January 3, 2022, for $12,600 and was depreciated over an expected useful life of 3 years with no residual value.
Nov 1.	Traded in an old vehicle for a new vehicle, receiving a $10,000 trade-in allowance and paying $36,000 cash. The old vehicle had been purchased on Nov 1, 2018, at a cost of $35,000. The estimated useful life was 8 years and the estimated residual value was $5,000. The fair value of the old vehicle was $7,000 on Nov 1, 2024

a) For each of these disposals, prepare a journal entry to record depreciation from January 1, 2024, to the date of disposal, if required.

b) Record the disposals.

Calculate gain or loss on disposal.

Please show all steps.

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