Howarth Manufacturing Company purchased equipment on June 30, 2017, at a cost of $800,000. The residual value of the equipment was estimated to be $50,000 at the end of a five-year life. The equipment was sold on March 31, 2021, for $170,000. Howarth uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service. ces Required: 1. Prepare the journal entry to record the sale. 2. Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 Event 1 Cash General Journal Accumulated depreciation-equipment Gain on sale of equipment Equipment < Required 1 Required 2 > **** Debit 170,000 679,040 Credit 49,040 800,000

Howarth Manufacturing Company purchased equipment on June 30, 2017, at a cost of $800,000. The residual value of the equipment was estimated to be $50,000 at the end of a five-year life. The equipment was sold on March 31, 2021, for $170,000. Howarth uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service. ces Required: 1. Prepare the journal entry to record the sale. 2. Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 Event 1 Cash General Journal Accumulated depreciation-equipment Gain on sale of equipment Equipment < Required 1 Required 2 > **** Debit 170,000 679,040 Credit 49,040 800,000

Name: Howarth Manufacturing Company purchased equipment on June 30, 2017, a
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: Howarth Manufacturing Company purchased equipment on June 30, 2017, at a cost of $800,000. The residual value of the equipmentwas estimated to be $50,000 at the end of a five-year life. The equipment was sold on March 31, 2021, for $170,000. Howarth

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Howarth Manufacturing Company purchased equipment on June 30, 2017, at a cost of $155,000. The residual value of the equipment was estimated to be $14,000 at the end of a five-year life. The equipment was sold on March 31, 2021, for $48,000. Howarth uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service. Required:1. Prepare the journal entry to record the sale.2. Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale.
Winia Corporation purchased farm equipment on January 1, 2019, for $280,000. In 2019 and 2020, Winia depreciated the asset on a straight-line basis with an estimated useful life of five years and a $90,000 residual value. In 2021, due to changes in technology, Winia revised the residual value to $30,000 but still plans to use the equipment for the full five years. What depreciation would Winia record for the year 2021 on this equipment? $8,000
On September 30, 2017, Foley Distribution Service purchased a copy machine for $36,800. Foley Distribution Service expects the machine to last for four years and to have a residual value of $2,000. Compute depreciation expense on the machine for the year ended December 31, 2017, using the straight-line method.
Howarth Manufacturing Company purchased equipment on June 30, 2020, at a cost of $90,000. The residual value of the equipment was estimated to be $6,000 at the end of a five-year life. The equipment was sold on March 31, 2024, for $18,000. Howarth uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service. Required: Prepare the journal entry to record the sale. Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale.
SABM Co. acquired a machine on January 1, 2018, at a cost of P120,000. It was expected to have a useful economic life of 10 years. SABM Co. uses the straight-line method in depreciating its machinery and equipment and reports on a calendar year basis. On December 31, 2020, the machine was appraised as having a gross replacement cost of P150,000. SABM Co. applies the revaluation model in valuing this class of property, plant, and equipment after its initial recognition. What is the balance of the revaluation surplus account on December 31, 2021 assuming that piecemeal realization of revaluation surplus is in order? * P30,000 P21,000 P18,000 P15,000 answer not given
Home Appliances purchased machinery on April 30, 2014 for $88,000. The useful life of this machinery is estimated at 8 years, with an $8,000 residual value. Home Appliances uses straight-line depreciation and rounds depreciation for fractional years to the nearest month. Depreciation expense recognized on this machinery in 2014 will be:
Swindall Industries uses straight-line depreciation on all of its depreciable assets. The company records annual depreciation expense at the end of each calendar year. On January 11, 2017, the company purchased a machine costing $117,000. The machine's useful life was estimated to be 12 years with an estimated residual value of $17,200. Depreciation for partial years is recorded to the nearest full month. In 2021, after almost five years of experience with the machine, management decided to revise its estimated life from 12 years to 20 years. No change was made in the estimated residual value. The revised estimate of the useful life was decided prior to recording annual depreciation expense for the year ended December 31, 2021. a. Prepare journal entries in chronological order for the given events, beginning with the purchase of the machinery on January 11, 2017. Show separately the recording of depreciation expense in 2017 through 2021. (Do not round intermediate calculations. Round…
Annual depreciation expense on a building purchased a few years ago (using the straight-line method) is $4,800. The cost of the building was $96,000. The current book value of the equipment (January 1, 2021) is $81,600. At the time of purchase, the asset was estimated to have a zero salvage value. On January 1, 2021, the company decided to reduce the original useful life by 25% and to establish a salvage value of $4,800. The firm also decided double-declining-balance depreciation was more appropriate. Ignore tax effects. 1. Prepare the journal entry, if any, to report the accounting change under GAAP. 2. Record the annual depreciation for 2021.
On July 31, 2021, John Deere Manufacturing Company purchased a machine that cost $1,200,000, with an estimated residual value of $58,000, and an estimated useful life of ten years. The machine is being depreciated on a straight-line basis. At the end of the second year, what is the total amount of depreciation expense reported on the Income Statement and the total amount of accumulated depreciation reported on the Balance Sheet? (Round final answers to whole dollars) Depreciation Expense Accumulated Depreciation
On January 1, 2010, Graham Company purchased a new machine for $2,100,000. The new machine has an estimated useful life of nine years and the residual value was estimated to be $75,000. Depreciation was computed on the sum-of-the-years'-digits method. What amount should be shown in Graham's balance sheet at December 31, 2011, net of accumulated depreciation, for this machine? OA. $1,244,250 OB. $1,695,000 OC $1,335,000 OD. $1,306,666
BLACK JACK Company purchased an automotive equipment on June 30, 2018 for P3,000,000. Atthe date of acquisition, the equipment had a life of six years with no salvage value. Theequipment is being depreciated on a straight-line basis. On October 1, 2021, BLACK JACKdetermined that the equipment had a remaining useful life of five years. What is the depreciation expense for the year ended December 31, 2021?
On January 1, 2018, KingKong Corp. purchased an equipment with an estimated useful life of 8 years. The equipment was expected to have a residual value of P2,000 at the end of its useful life. The sum-of-the-years digits method was used in computing depreciation. For the year ended December 31, 2021, the depreciation applicable to this equipment was P4,200.What was the acquisition cost of the equipment?