Equipment acquired on January 8 at a cost of $199,350 has an estimated useful life of 20 years, has an estimated residual value of $8,950, and is depreciated by the straight-line method. Question Content Area a.  What was the book value of the equipment at December 31 the end of the fourth year? Book value is the initial cost of the fixed asset minus the accumulated depreciation. Question Content Area b.  Assuming that the equipment was sold on April 1 of the fifth year for $153,470. 1.  Journalize the entry to record depreciation for the 3 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.   Account Debit Credit    Depreciation Expense-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. Question Content Area 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.   Account Debit Credit     cash         Accumulated Depreciation-Equipment         Loss on Sale of Equipment          Equipment

Century 21 Accounting General Journal
11th Edition
ISBN:9781337680059
Author:Gilbertson
Publisher:Gilbertson
Chapter19: Accounting For Plant Assets, Depreciation, And Intangible Assets
Section19.5: Declining-balance Method Of Depreciation
Problem 1OYO
icon
Related questions
Question

Equipment acquired on January 8 at a cost of $199,350 has an estimated useful life of 20 years, has an estimated residual value of $8,950, and is depreciated by the straight-line method.

Question Content Area

a.  What was the book value of the equipment at December 31 the end of the fourth year?

Book value is the initial cost of the fixed asset minus the accumulated depreciation.

Question Content Area

b.  Assuming that the equipment was sold on April 1 of the fifth year for $153,470.

1.  Journalize the entry to record depreciation for the 3 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.

  Account Debit Credit
   Depreciation Expense-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.

Question Content Area

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.

  Account Debit Credit  
  cash      
  Accumulated Depreciation-Equipment      
  Loss on Sale of Equipment
 
   
   Equipment
 
   
   
 
   
   
 
   
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Century 21 Accounting General Journal
Century 21 Accounting General Journal
Accounting
ISBN:
9781337680059
Author:
Gilbertson
Publisher:
Cengage
Income Tax Fundamentals 2020
Income Tax Fundamentals 2020
Accounting
ISBN:
9780357391129
Author:
WHITTENBURG
Publisher:
Cengage
Financial Reporting, Financial Statement Analysis…
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Century 21 Accounting Multicolumn Journal
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:
9781337679503
Author:
Gilbertson
Publisher:
Cengage