Equipment was acquired at the beginning of the year at a cost of $800,000. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of 10 years and an estimated residual value of $60,000. Question Content Area a.  What was the depreciation for the first year? b.  Assuming the equipment was sold at the end of the second year for $650,000, determine the gain or loss on the sale of the equipment.        Question Content Area c.  Journalize the entry on December 31 to record the sale. If an amount box does not require an entry, leave it blank. Date Account Debit Credit December 31

SWFT Comprehensive Vol 2020
43rd Edition
ISBN:9780357391723
Author:Maloney
Publisher:Maloney
Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion
Section: Chapter Questions
Problem 7BCRQ
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Equipment was acquired at the beginning of the year at a cost of $800,000. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of 10 years and an estimated residual value of $60,000.

Question Content Area

a.  What was the depreciation for the first year?

b.  Assuming the equipment was sold at the end of the second year for $650,000, determine the gain or loss on the sale of the equipment.
 

 
 
 

Question Content Area

c.  Journalize the entry on December 31 to record the sale. If an amount box does not require an entry, leave it blank.

Date Account Debit Credit
December 31
 
   
 
 
   
 
 
   
 
 
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