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Equipment was acquired at the beginning of the year at a cost of $637,500. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of 9 years and an estimated residual value of $43,195. a. What was the depreciation for the first year? Round your intermediate calculations to 4 decimal places. Round the depreciation for the year to the nearest whole dollar. b. Assuming the equipment was sold at the end of the second year for $631,697, determine the gain or loss on the sale of the equipment. C. Journalize the entry on December 31 to record the sale. Refer to the Chart of Accounts for exact wording of account titles.

Equipment was acquired at the beginning of the year at a cost of $637,500. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of 9 years and an estimated residual value of $43,195. a. What was the depreciation for the first year? Round your intermediate calculations to 4 decimal places. Round the depreciation for the year to the nearest whole dollar. b. Assuming the equipment was sold at the end of the second year for $631,697, determine the gain or loss on the sale of the equipment. C. Journalize the entry on December 31 to record the sale. Refer to the Chart of Accounts for exact wording of account titles.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**Depreciation of Equipment: An Example Calculation** *Equipment Details:* - Acquired at the beginning of the year at a cost of $637,500. - Depreciation method: Double-declining-balance. - Estimated useful life: 9 years. - Estimated residual value: $43,195. *Tasks:* a. **Calculate the Depreciation for the First Year:** - Use the double-declining-balance method. - Perform intermediate calculations to 4 decimal places. - Round the final depreciation amount to the nearest whole dollar. b. **Determine Gain or Loss on Sale:** - Assume the equipment is sold at the end of the second year for $631,697. - Calculate the gain or loss from the sale. c. **Journalize the Sale Entry:** - Make a journal entry on December 31 to record the sale. - Refer to the Chart of Accounts for exact wording of account titles.
Transcribed Image Text:**Depreciation of Equipment: An Example Calculation** *Equipment Details:* - Acquired at the beginning of the year at a cost of $637,500. - Depreciation method: Double-declining-balance. - Estimated useful life: 9 years. - Estimated residual value: $43,195. *Tasks:* a. **Calculate the Depreciation for the First Year:** - Use the double-declining-balance method. - Perform intermediate calculations to 4 decimal places. - Round the final depreciation amount to the nearest whole dollar. b. **Determine Gain or Loss on Sale:** - Assume the equipment is sold at the end of the second year for $631,697. - Calculate the gain or loss from the sale. c. **Journalize the Sale Entry:** - Make a journal entry on December 31 to record the sale. - Refer to the Chart of Accounts for exact wording of account titles.
### Educational Transcription: Journalizing Sales Entry **Instruction:** - Journalize the entry on December 31 to record the sale. Refer to the Chart of Accounts for the exact wording of account titles. **Note:** Question not attempted. --- #### JOURNAL | PAGE 1 | |---| **Score:** 0/49 #### Accounting Equation | DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |------|-------------|------------|-------|--------|--------|-------------|--------| | 1 | | | | | | | | | 2 | | | | | | | | | 3 | | | | | | | | | 4 | | | | | | | | --- This template is used for recording journal entries in accounting. Each column serves a specific purpose: - **Date:** The date of the transaction. - **Description:** A brief explanation of the transaction. - **Post. Ref.:** Posting reference, linking the journal to the general ledger. - **Debit and Credit Columns:** Shows amounts to be debited and credited. They must be balanced. - **Assets, Liabilities, Equity Columns:** Used to support the accounting equation: \[ \text{Assets} = \text{Liabilities} + \text{Equity} \] The table is currently blank as the question has not been attempted, and the score is 0 out of 49.
Transcribed Image Text:### Educational Transcription: Journalizing Sales Entry **Instruction:** - Journalize the entry on December 31 to record the sale. Refer to the Chart of Accounts for the exact wording of account titles. **Note:** Question not attempted. --- #### JOURNAL | PAGE 1 | |---| **Score:** 0/49 #### Accounting Equation | DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |------|-------------|------------|-------|--------|--------|-------------|--------| | 1 | | | | | | | | | 2 | | | | | | | | | 3 | | | | | | | | | 4 | | | | | | | | --- This template is used for recording journal entries in accounting. Each column serves a specific purpose: - **Date:** The date of the transaction. - **Description:** A brief explanation of the transaction. - **Post. Ref.:** Posting reference, linking the journal to the general ledger. - **Debit and Credit Columns:** Shows amounts to be debited and credited. They must be balanced. - **Assets, Liabilities, Equity Columns:** Used to support the accounting equation: \[ \text{Assets} = \text{Liabilities} + \text{Equity} \] The table is currently blank as the question has not been attempted, and the score is 0 out of 49.
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