Disposal of fixed asset Equipment acquired on January 6 at a cost of $386,400 has an estimated useful life of 10 years and an estimated residual value of $50,400. a. What was the annual amount of depreciation for Years 1-3 using the straight-line method of depreciation? Year Depreciation Expense Year 1 Year 2 Year 3 b. What was the book value of the equipment on January 1 of Year 4? c. Assuming that the equipment was sold on January 3 of Year 4 for $271,300, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. January 3 d. Assuming that the equipment had been sold on January 3 of Year 4 for $291,300 instead of $271,300, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. January 3
Disposal of fixed asset Equipment acquired on January 6 at a cost of $386,400 has an estimated useful life of 10 years and an estimated residual value of $50,400. a. What was the annual amount of depreciation for Years 1-3 using the straight-line method of depreciation? Year Depreciation Expense Year 1 Year 2 Year 3 b. What was the book value of the equipment on January 1 of Year 4? c. Assuming that the equipment was sold on January 3 of Year 4 for $271,300, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. January 3 d. Assuming that the equipment had been sold on January 3 of Year 4 for $291,300 instead of $271,300, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. January 3
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter19: Accounting For Plant Assets, Depreciation, And Intangible Assets
Section: Chapter Questions
Problem 5AP
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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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![Disposal of fixed asset
Equipment acquired on January 6 at a cost of $386,400 has an estimated useful life of 10 years and an estimated residual value of $50,400.
a. What was the annual amount of depreciation for Years 1-3 using the straight-line method of depreciation?
Year
Depreciation Expense
Year 1
Year 2
Year 3
b. What was the book value of the equipment on January 1 of Year 4?
c. Assuming that the equipment was sold on January 3 of Year 4 for $271,300, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.
January 3
d. Assuming that the equipment had been sold on January 3 of Year 4 for $291,300 instead of $271,300, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.
January 3](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2f45bebc-2afe-45cc-8e28-eea88d146913%2Fc06a40a5-1123-41b2-96fe-7502e2dc4a92%2Fwjp3vl_processed.png&w=3840&q=75)
Transcribed Image Text:Disposal of fixed asset
Equipment acquired on January 6 at a cost of $386,400 has an estimated useful life of 10 years and an estimated residual value of $50,400.
a. What was the annual amount of depreciation for Years 1-3 using the straight-line method of depreciation?
Year
Depreciation Expense
Year 1
Year 2
Year 3
b. What was the book value of the equipment on January 1 of Year 4?
c. Assuming that the equipment was sold on January 3 of Year 4 for $271,300, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.
January 3
d. Assuming that the equipment had been sold on January 3 of Year 4 for $291,300 instead of $271,300, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.
January 3
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