Equipment acquired on January 8 at a cost of $140,640 has an estimated useful life of 14 years, has an estimated residual value of $8,200, 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 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 $93,635. 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 fill in the blank fill in the blank Accumulated Depreciation-Equipment fill in the blank fill in the blank 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 fill in the blank fill in the blank Accumulated Depreciation-Equipment fill in the blank fill in the blank Loss on Sale of Equipment fill in the blank fill in the blank
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.
Equipment acquired on January 8 at a cost of $140,640 has an estimated useful life of 14 years, has an estimated residual value of $8,200, and is
a. What was the book value of the equipment at December 31 the end of the fourth year?
$fill in the blank
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 $93,635.
1.
| Depreciation Expense-Equipment | fill in the blank | fill in the blank | |
| Accumulated Depreciation-Equipment | fill in the blank | fill in the blank |
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 | fill in the blank | fill in the blank | |
| Accumulated Depreciation-Equipment | fill in the blank | fill in the blank | |
| Loss on Sale of Equipment | fill in the blank | fill in the blank | |
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