Disposal of Fixed Asset Equipment acquired on January 8, 20Y1, at a cost of $607,500, has an estimated useful life of 17 years and an estimated residual value of $72,900. a. What was the annual amount of depreciation for the years 20Y1, 20Y2, and 20Y3, using the straight-line method of depreciation? Round annual depreciation to the nearest dollar and use this amount in your Depreciation expense 20Y1 31,447 V 20Y2 31,447 V 20Υ3 31,447 V b. What was the book value of the equipment on January 1, 20Y4? For decreases in accounts or outflows of cash, enter your answers as negative numbers. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box c. Assuming that the equipment was sold on January 7, 20Y4, for $151,875, illustrate the effects on the accounts and financial statements of the sale. Balance Sheet Statement of Income Assets Liabilities + Stockholders' Equity Cash Flows Statement Cash v Equipment Accumulated depreciation - equipment v No effect Retained earnings |151,875. V Jan. 7. Statement of Cash Flows Income Statement Investing v 151,875 Loss on disposal of fixed assets v d. Assuming that the equipment was sold on January 7, 20Y4, for $729,000 instead of $151,875, illustrate the effects on the accounts and financial statements of the sale. Balance Sheet Statement of Income Assets Liabilities + Stockholders' Equity Cash Flows Statement Cash v + Equipment V Accumulated depreciation - equipment No effect v Retained earnings %3D 729,000. 215,841 Jan. 7. Statement of Cash Flows Income Statement Investing 729,000. V Gain on disposal of fixed assets v 215,841
Disposal of Fixed Asset Equipment acquired on January 8, 20Y1, at a cost of $607,500, has an estimated useful life of 17 years and an estimated residual value of $72,900. a. What was the annual amount of depreciation for the years 20Y1, 20Y2, and 20Y3, using the straight-line method of depreciation? Round annual depreciation to the nearest dollar and use this amount in your Depreciation expense 20Y1 31,447 V 20Y2 31,447 V 20Υ3 31,447 V b. What was the book value of the equipment on January 1, 20Y4? For decreases in accounts or outflows of cash, enter your answers as negative numbers. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box c. Assuming that the equipment was sold on January 7, 20Y4, for $151,875, illustrate the effects on the accounts and financial statements of the sale. Balance Sheet Statement of Income Assets Liabilities + Stockholders' Equity Cash Flows Statement Cash v Equipment Accumulated depreciation - equipment v No effect Retained earnings |151,875. V Jan. 7. Statement of Cash Flows Income Statement Investing v 151,875 Loss on disposal of fixed assets v d. Assuming that the equipment was sold on January 7, 20Y4, for $729,000 instead of $151,875, illustrate the effects on the accounts and financial statements of the sale. Balance Sheet Statement of Income Assets Liabilities + Stockholders' Equity Cash Flows Statement Cash v + Equipment V Accumulated depreciation - equipment No effect v Retained earnings %3D 729,000. 215,841 Jan. 7. Statement of Cash Flows Income Statement Investing 729,000. V Gain on disposal of fixed assets v 215,841
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles
Section: Chapter Questions
Problem 8.6E
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