Equipment was purchased for $37,000 on January 1, 2024. The equipment's estimated useful life was five years, and its residual value was $3,000. The double-declining - balance method ofdepreciation was used. What is the journal entry to record the sale of the equipment for $42,000 on January 3, 2025?OA. Equipment37,000Accumulated Depreciation Equipment13,600Gain on Disposal8,600Cash42,000OB. Cash42,000Accumulated Depreciation Equipment14,800Gain on Disposal19,800Equipment37,000O C. Cash42,000Accumulated Depreciation Equipment3,000Gain on DisposalEquipment8,00037,000OD. Equipment42,000Accumulated DepreciationEquipment10,200Gain on Disposal15,200Cash37,000

Step 1: We compute for the depreciation for 1 year by multiplying the cost by the depreciation rate…

Answered: Equipment was purchased for $37,000 on…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles

Section: Chapter Questions

Problem 8.6E

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Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.
Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000
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