Equipment was acquired at the beginning of the year at a cost of $287,100. The equipment was depreciated using the straight-line method based on an estimated useful life of nine years and an estimated residual value of $27,000. a. What was the depreciation for the first year? $fill in the blank b. Assuming the equipment was sold at the end of the fifth year for $138,700, determine the gain or loss on the sale of the equipment. Enter your answer as a positive amount. $ fill in the blank - loss or gain c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. debit credit blank Cash $ fill in blank $fill in blank Accumulated Depreciation-Equipment $fill in blank $fill in blank Loss on Sale of Equipment $fill in blank $fill in blank equipment $fill in blank $fill in 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 was acquired at the beginning of the year at a cost of $287,100. The equipment was
a. What was the depreciation for the first year?
$fill in the blank
b. Assuming the equipment was sold at the end of the fifth year for $138,700, determine the gain or loss on the sale of the equipment. Enter your answer as a positive amount.
$ fill in the blank - loss or gain
c.
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debit | credit | ||
| blank |
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Cash | $ fill in blank | $fill in blank |
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$fill in blank | $fill in blank | ||
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Loss on Sale of Equipment | $fill in blank | $fill in blank | |
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equipment | $fill in blank | $fill in blank |
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