Entries for Sale of Fixed Asset Equipment acquired on January 8 at a cost of $151,850 has an estimated useful life of 17 years, has an estimated residual value of $7,350, and is depreciated by the straight-line method. a. What was the book value of the equipment at December 31 the end of the fourth year? $fill in the blank f27e84fc8020072_1 Feedback Book value is the initial cost of the fixed asset minus the accumulated depreciation. b. Assume that the equipment was sold on April 1 of the fifth year for $110,335. 1. Journalize the entry to record depreciation for the three months until the sale date. If an amount box does not require an entry, leave it blank. Round your answers to the nearest whole dollar if required. Depreciation Expense-Equipment Depreciation Expense-Equipment Accumulated Depreciation-Equipment Accumulated Depreciation-Equipment Feedback The depreciation account of the fixed asset being sold or discarded needs to be updated to reflect the months of use in the year it is being discarded or sold. The straight-line method of depreciation calculates the amount of depreciation to be recognized each year. 2. Journalize the entry to record the sale of the equipment. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations. Cash Cash Accumulated Depreciation-Equipment Accumulated Depreciation-Equipment Loss on Sale of Equipment Loss on Sale of Equipment Equipment Equipment
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.
Entries for Sale of Fixed Asset
Equipment acquired on January 8 at a cost of $151,850 has an estimated useful life of 17 years, has an estimated residual value of $7,350, and is depreciated by the straight-line method.
a. What was the book value of the equipment at December 31 the end of the fourth year?
$fill in the blank f27e84fc8020072_1
Book value is the initial cost of the fixed asset minus the
b. Assume that the equipment was sold on April 1 of the fifth year for $110,335.
1.
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Depreciation Expense-Equipment | Depreciation Expense-Equipment | |
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Accumulated Depreciation-Equipment | Accumulated Depreciation-Equipment |
The depreciation account of the fixed asset being sold or discarded needs to be updated to reflect the months of use in the year it is being discarded or sold. The straight-line method of depreciation calculates the amount of depreciation to be recognized each year.
2. Journalize the entry to record the sale of the equipment. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations.
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Cash | Cash | |
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Accumulated Depreciation-Equipment | Accumulated Depreciation-Equipment | |
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Loss on Sale of Equipment | Loss on Sale of Equipment | |
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Equipment | Equipment |
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