Howarth Manufacturing Company purchased equipment on June 30, 2020, at a cost of $125,000. The residual value of the equipment was estimated to be $8,000 at the end of a five-year life. The equipment was sold on March 31, 2024, for $34,000. 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.
Howarth Manufacturing Company purchased equipment on June 30, 2020, at a cost of $125,000. The residual value of the equipment was estimated to be $8,000 at the end of a five-year life. The equipment was sold on March 31, 2024, for $34,000. 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.
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 13PA: Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value...
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![Howarth Manufacturing Company purchased equipment on June 30, 2020, at a cost of $125,000. The residual value of the equipment
was estimated to be $8,000 at the end of a five-year life. The equipment was sold on March 31, 2024, for $34,000. 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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb12a3b82-890e-471b-97ff-cf1e0fd493b2%2F71de8881-4ba9-48d1-b5de-a8a2f3ef632d%2Fwi9bka_processed.png&w=3840&q=75)
Transcribed Image Text:Howarth Manufacturing Company purchased equipment on June 30, 2020, at a cost of $125,000. The residual value of the equipment
was estimated to be $8,000 at the end of a five-year life. The equipment was sold on March 31, 2024, for $34,000. 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.
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