I am nor sure if i have the double declining correct but i am having troublr with journal entries Depreciation by Two Methods; Sale of Long-term or relatively permanent tangible assets such as equipment, machinery, and buildings that are used in the normal business operations and that depreciate over time.Fixed Asset New tire retreading equipment, acquired at a cost of $110,000 on September 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of four years and an estimated The estimated value of a fixed asset at the end of its useful life.residual value of $7,500. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining-balance method was selected. On September 6 of Year 4, the equipment was sold for $18,000. Required: 1. Determine the annual depreciation expense for each of the estimated four years of use, the accumulated depreciation at the end of each year, and the The cost of a fixed asset minus accumulated depreciation on the asset.book value of the equipment at the end of each year by (a) the straight-line method and (b) the double-declining-balance method. a. A method of depreciation that provides for equal periodic depreciation expense over the estimated life of a fixed asset.Straight-line method Year DepreciationExpense Accumulated Depreciation,End of Year Book Value, End of Year 1 $25625 $25625 $84375 2 $25625 $51250 $58750 3 $25625 $76875 $33125 4 $25625 $102500 $7500 b. A method of depreciation that provides periodic depreciation expense based on the declining book value of a fixed asset over its estimated life.Double-declining-balance method Year DepreciationExpense Accumulated Depreciation,End of Year Book Value,End of Year 1 $55000 $55000 $55000 2 $27500 $82500 $27500 3 $13750 $96250 $13750 4 $6250 $102500 $7500 2. Journalize the entry to record the sale, assuming double-declining balance method is used. If an amount box does not require an entry, leave it blank. having trouble with journal entries? Cash Depreciation Expense-Equipment Equipment Gain on Sale of Equipment Loss on Sale of Equipment Accounts Receivable Accumulated Depreciation-Equipment Depreciation Expense-Equipment Equipment Loss on Sale of Equipment Accounts Payable Accumulated Depreciation-Equipment Cash Depreciation Expense-Equipment Equipment Accumulated Depreciation-Equipment Cash Depreciation Expense-Equipment Gain on Sale of Equipment Loss on Sale of Equipment 3. Journalize the entry to record the sale in (2), assuming that the equipment sold for $10,500 instead of $18,000. If an amount box does not require an entry, leave it blank. must put correct journal entrie and money value Accounts recievable 18000 Cash Depreciation Expense-Equipment Equipment Gain on Sale of Equipment Accumulated Depreciation-Equipment Depreciation Expense-Equipment Equipment Gain on Sale of Equipment Notes Payable Buildings Depreciation Expense-Equipment Equipment Gain on Sale of Equipment Loss on Sale of Equipment Accumulated Depreciation-Equipment Depreciation Expense-Equipment Equipment Gain on Sale of Equipment Loss on Sale of Equipment
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.
I am nor sure if i have the double declining correct but i am having troublr with journal entries
New tire retreading equipment, acquired at a cost of $110,000 on September 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of four years and an estimated The estimated value of a fixed asset at the end of its useful life.residual value of $7,500. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining-balance method was selected.
On September 6 of Year 4, the equipment was sold for $18,000.
Required:
1. Determine the annual depreciation expense for each of the estimated four years of use, the
a. A method of depreciation that provides for equal periodic depreciation expense over the estimated life of a fixed asset.Straight-line method
| Year | Depreciation Expense |
Accumulated Depreciation, End of Year |
Book Value, End of Year |
| 1 | $25625 | $25625 | $84375 |
| 2 | $25625 | $51250 | $58750 |
| 3 | $25625 | $76875 | $33125 |
| 4 | $25625 | $102500 | $7500 |
b. A method of depreciation that provides periodic depreciation expense based on the declining book value of a fixed asset over its estimated life.Double-declining-balance method
| Year | Depreciation Expense |
Accumulated Depreciation, End of Year |
Book Value, End of Year |
| 1 | $55000 | $55000 | $55000 |
| 2 | $27500 | $82500 | $27500 |
| 3 | $13750 | $96250 | $13750 |
| 4 | $6250 | $102500 | $7500 |
2. Journalize the entry to record the sale, assuming double-declining balance method is used. If an amount box does not require an entry, leave it blank.
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3. Journalize the entry to record the sale in (2), assuming that the equipment sold for $10,500 instead of $18,000. If an amount box does not require an entry, leave it blank.
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