Here are selected 2027 transactions of Ayayai Corporation. Jan. 1 June 30 Dec. 31 Retired a piece of machinery that was purchased on January 1, 2017. The machine cost $62,200 and had a useful life of 10 years with no salvage value. Sold a computer that was purchased on January 1, 2025. The computer cost $36,800 and had a useful life of 4 years with no salvage value. The computer was sold for $4,100 cash. Sold a delivery truck for $9,490 cash. The truck cost $24,900 when it was purchased on January 1, 2024, and was depreciated based on a 5-year useful life with a $3,800 salvage value. Prepare a tabular summary to record all transactions described on the above dates. Update depreciation on assets disposed of, wher applicable. Ayayai Corporation uses straight-line depreciation. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)
Here are selected 2027 transactions of Ayayai Corporation. Jan. 1 June 30 Dec. 31 Retired a piece of machinery that was purchased on January 1, 2017. The machine cost $62,200 and had a useful life of 10 years with no salvage value. Sold a computer that was purchased on January 1, 2025. The computer cost $36,800 and had a useful life of 4 years with no salvage value. The computer was sold for $4,100 cash. Sold a delivery truck for $9,490 cash. The truck cost $24,900 when it was purchased on January 1, 2024, and was depreciated based on a 5-year useful life with a $3,800 salvage value. Prepare a tabular summary to record all transactions described on the above dates. Update depreciation on assets disposed of, wher applicable. Ayayai Corporation uses straight-line depreciation. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:Here are selected 2027 transactions of Ayayai Corporation.
Jan. 1
June
30
Dec.
31
Retired a piece of machinery that was purchased on January 1, 2017. The machine cost $62,200 and had a useful life
of 10 years with no salvage value.
Sold a computer that was purchased on January 1, 2025. The computer cost $36,800 and had a useful life of 4 years with
no salvage value. The computer was sold for $4,100 cash.
Sold a delivery truck for $9,490 cash. The truck cost $24,900 when it was purchased on January 1, 2024, and was
depreciated based on a 5-year useful life with a $3,800 salvage value.
Prepare a tabular summary to record all transactions described on the above dates. Update depreciation on assets disposed of, where
applicable. Ayayai Corporation uses straight-line depreciation. (If a transaction causes a decrease in Assets, Liabilities or Stockholders'
Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)
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