An equipment was bought in the beginning of January 2014 with the Original Cost of $48.000. Theequipment would be able to deliver economic function to the company for 6 years without residual value.Instruction:a.b.How much is the annual depreciation expense?Prepare the table of depreciation using Straight-Line MethodIf the equipment was sold for $10,000 at the end of 2018, did the company gain profit or get loss?How much was the profit or the loss?d. Please prepare the journal entry for the transaction when the equipment was sold.C.

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Description: An equipment was bought in the beginning of January 2014 with the Original Cost of $48.000. Theequipment would be able to deliver economic function to the company for 6 years without residual value.Instruction:a.b.How much is the annual depreciation

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An equipment was bought in the beginning of January 2014 with the Original Cost of $48.000. The equipment would be able to deliver economic function to the company for 6 years without residual value. Instruction: a. How much is the annual depreciation expense? b. Prepare the table of depreciation using Straight-Line Method C. If the equipment was sold for $10,000 at the end of 2018, did the company gain profit or get loss? How much was the profit or the loss?

An equipment was bought in the beginning of January 2014 with the Original Cost of $48.000. The equipment would be able to deliver economic function to the company for 6 years without residual value. Instruction: a. How much is the annual depreciation expense? b. Prepare the table of depreciation using Straight-Line Method C. If the equipment was sold for $10,000 at the end of 2018, did the company gain profit or get loss? How much was the profit or the loss?

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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Concept explainers

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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An equipment was bought in the beginning of January 2014 with the Original Cost of $48.000. The
equipment would be able to deliver economic function to the company for 6 years without residual value.
Instruction:
a.
b.
How much is the annual depreciation expense?
Prepare the table of depreciation using Straight-Line Method
If the equipment was sold for $10,000 at the end of 2018, did the company gain profit or get loss?
How much was the profit or the loss?
d. Please prepare the journal entry for the transaction when the equipment was sold.
C.

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