Equipment was acquired at the beginning or the year at $75,000. The equipment was depreciated using the straight-line mnethod based upon an estimated userul life or 6 years and ar estimated residual value of $7,500. a. What was the depreciation expense for the first year? 11,250 V b. Assuming the equipment was sold at the end of the second year for $59,000, determine the gain or loss on sale of the equipment. Gain Feedback V Check My Work Partially correct c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Cash 7,500 X Accumulated Depreciation 67,500 11,250 x Equipment 75,000 V Gain on Sale of Equipment

Equipment was acquired at the beginning or the year at $75,000. The equipment was depreciated using the straight-line mnethod based upon an estimated userul life or 6 years and ar estimated residual value of $7,500. a. What was the depreciation expense for the first year? 11,250 V b. Assuming the equipment was sold at the end of the second year for $59,000, determine the gain or loss on sale of the equipment. Gain Feedback V Check My Work Partially correct c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Cash 7,500 X Accumulated Depreciation 67,500 11,250 x Equipment 75,000 V Gain on Sale of Equipment

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Description: Equipment was acquired at the beginning of the year at a cost of $75,000. The equipment was depreciated using the straight-line method based upon an estimated useful life of 6 years and anestimated residual value of $7,500.a. What was the depreciati

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 3RE: Albany Corporation purchased equipment at the beginning of Year 1 for 75,000. The asset does not...

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Concept explainers

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.

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Question

Equipment was acquired at the beginning of the year at a cost of $75,000. The equipment was depreciated using the straight-line method based upon an estimated useful life of 6 years and an
estimated residual value of $7,500.
a. What was the depreciation expense for the first year?
$4
11,250
b. Assuming the equipment was sold at the end of the second year for $59,000, determine the gain or loss on sale of the equipment.
Gain
Feedback
V Check My Work
Partially correct
c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.
Cash
7,500
Accumulated Depreciation
67,500 X
11,250
Equipment
75,000
Gain on Sale of Equipment

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a. Formula to compute annual depreciation expense under straight-line method

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Computation of annual depreciation expense

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